omniture

CER Turns to Profit and Doubles Revenue to $25.6 Million in First Half 2011

2011-08-16 10:02 780

SHANGHAI, August 16, 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 second quarter and first half of fiscal 2011, ending June 30, 2011, as compared with the figures for the same period in 2010.

Highlights for the 2nd quarter 2011, compared with the same quarter 2010:

  • Revenues increased 154% to $18.3 million.
  • Gross profit increased 217% to $3,142,000.
  • Net income increased 294% to $1,067,000.

Highlights for the half year, compared with first half year 2010:

  • Revenues increased 127% to $25.6 million.
  • Gross profit increased 172% to $4,381,000.
  • Net income increased 48% to $681,000.

First half 2011 results

Revenues for the first half ended June 30, 2011, were $25.6 million, up from $11.3 million in the same period a year ago.

Gross profit in the first half increased to $4,381,089 or 17.1 percent of sales, compared to $1,608,060 or 14.2 percent of sales in the same period a year ago. The company achieved an operating gain of $504,941 compared to loss of $898,224 in the same period a year ago.

Benefitting from increases in income from operations, net income increased to $680,796 compared to $459,644 in the same period a year ago.

"Revenue growth in the second quarter and first half of the year reflects our marketing efforts and new manufacturing facility and, in particular, one significant EPC contract," CER Chief Executive Officer Qinqhuan Wu said. Mr. Wu continued, "In the first half of 2011, with our new manufacturing facility in operation and our ability to perform more EPC contracts, we saw improvements in our revenues and gross profits. For the second half of 2011, based on our current contracts and production schedule, we anticipate positive results in line with the first half of the year."

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.

Contact: Jessica Hu

China Energy Recovery

+86-21-2028-1866*304

hudie@cerenergy.com



CHINA ENERGY RECOVERY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2010 AND 2011

(UNAUDITED)



Three months ended June 30,


Six months ended June 30,



2010


2011


2010


2011

REVENUES









Third parties

$

7,206,141

$

6,976,445

$

11,299,919

$

12,581,847

Related party


-


11,293,381


-


13,068,038

Total revenue


7,206,141


18,269,826


11,299,919


25,649,885










COST OF REVENUES









Third parties


(6,215,657)


(15,127,655)


(9,691,859)


(21,268,796)

Total cost of revenues


(6,215,657)


(15,127,655)


(9,691,859)


(21,268,796)









GROSS PROFIT


990,484


3,142,171


1,608,060


4,381,089










SELLING, GENERAL AND ADMINISTRATIVE EXPENSES


(1,350,195)


(2,063,067)


(2,506,284)


(3,876,148)










(LOSS)/INCOME FROM OPERATIONS


(359,711)


1,079,104


(898,224)


504,941










OTHER INCOME/(EXPENSE), NET:









Change in fair value of warrants


559,412


437,901


1,077,898


915,790

Change in fair value of derivative liabilities


507,405


161,501


818,905


323,718

Non-operating income/(expense), net


242,643


60,199


971,356


(9,936)

Interest expenses, net


(644,773)


(605,739)


(1,309,141)


(975,264)

Total other income, net


664,687


53,862


1,559,018


254,308










INCOME FROM OPERATIONS BEFORE INCOME TAXES


304,976


1,132,966


660,794


759,249










PROVISION FOR INCOME TAXES


(33,911)


(66,084)


(201,150)


(78,453)










NET INCOME


271,065


1,066,882


459,644


680,796










OTHER COMPREHENSIVE INCOME/(LOSS)









Foreign currency translation adjustment


18,568


(186,896)


28,000


(86,609)










COMPREHENSIVE INCOME

$

289,633

$

879,986

$

487,644

$

594,187

EARNINGS PER SHARE:








Basic


0.01


0.03

$

0.02

$

0.02

Diluted


0.01


0.03

$

0.02

$

0.02

WEIGHTED AVERAGE SHARES OUTSTANDING:








Basic


30,883,916


31,026,225

30,809,439


30,979,564

Diluted


30,883,916


31,103,542

30,809,439


31,056,881




CHINA ENERGY RECOVERY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2010 AND JUNE 30, 2011

(UNAUDITED)




December 31,


June 30,



2010


2011






ASSETS


CURRENT ASSETS:





Cash

$

2,996,076

$

3,637,519

Restricted cash


218,346


113,418

Notes receivable


1,341,359


200,876

Accounts receivable, net of allowance for doubtful accounts-third parties


7,059,935


7,197,345

Inventories


8,661,800


13,225,136

Other current assets and receivables


1,185,032


2,390,017

Deferred financial cost


215,623


66,919

Advances on purchases


15,200,669


36,302,215

Total current assets


36,878,840


63,133,445






NON-CURRENT ASSETS:





Plant and equipment, net


10,101,755


24,899,879

Deferred tax assets


171,776


323,966

Intangible assets


2,477,959


2,599,862

Long-term accounts receivable


4,679,121


-

Total non-current assets


17,430,611


27,823,707

Total Assets

$

54,309,451

$

90,957,152





LIABILITIES AND SHAREHOLDERS' EQUITY





CURRENT LIABILITIES:





Accounts payable

$

4,557,848

$

15,175,244

Accrued expenses and other liabilities


1,912,544


951,668

Advances from customers-third parties


27,530,065


54,497,070

Advances from customers-related party


-


2,297,156

Taxes payable


1,631,507


1,828,987

Short-term bank loans


4,333,700


5,200,028

Derivative liability, current


374,846


-

Long-term loan, current


3,177,973


543,778

Total current liabilities


43,518,483


80,493,931






NON-CURRENT LIABILITIES:





Warrant liability


1,332,760


401,423

Derivative liability


48,461


99,589

Convertible note


4,691,582


4,767,761

Long-term loan


543,778


-

Total non-current liabilities


6,616,581


5,268,773

Total Liabilities


50,135,064


85,762,704






SHAREHOLDERS' EQUITY:





Preferred stock($0.001 par value; 50,000,000 shares authorized, 200,000 shares issued and outstanding as of both December 31, 2010 and June 30, 2011)






189


189

Common stock($0.001 par value; 100,000,000 shares authorized, 30,906,266 and 31,085,859 shares issued and outstanding as of December 31, 2010 and June 30, 2011, respectively)








30,906


31,085

Additional Paid-in-capital


8,313,385


8,739,080

Accumulated deficit


(4,713,541)


(4,032,745)

Statutory reserves


132,802


132,802

Accumulated other comprehensive income


410,646


324,037

Total shareholders' equity


4,174,387


5,194,448

Total liabilities and shareholders' equity

$

54,309,451

$

90,957,152




Source: China Energy Recovery Inc.
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