omniture

China Industrial Waste Management Announces 2008 Second Quarter Results

Friday August 15, 2008, 9:00 am ET

DALIAN, China, Aug. 15 /Xinhua-PRNewswire-FirstCall/ -- China Industrial Waste Management, Inc. (OTC Bulletin Board: CIWT) today announced financial results for its second quarter ended June 30, 2008.

Highlights for the Second Quarter 2008

-- Total revenues for the second quarter of 2008 were US$3.59 million,

an increase of 45.9% from US$2.46 million for the same quarter in 2007.

-- Net income for the second quarter of 2008 was US$1.37 million, an

increase of 101% from US$0.69 million for the same quarter in 2007.

-- Diluted earnings per share for second quarter 2008 were $0.10,

compared to $0.05 earnings per share for 2007, up 100% year over year.

-- Net cash provided by operating activities for the first two quarters

of 2008 were US$2.05 million, representing an increase of US$0.18

million from US$1.87 million in the first two quarters of 2007.

Financial Results for Second Quarter 2008

Revenues

The Company’s operating revenues for the three and six months ended June 30, 2008 were $3,590,859 and $6,721,139, compared with $2,464,263 and $4,147,235 for the three and six months ended June 30, 2007, respectively.

Three Months Ended Six Months Ended

June 30, June 30,

2008 2007 2008 2007

Service fees 1,954,513 1,031,021 3,774,065 1,868,084

Sales of cupric sulfate 671,747 561,859 1,380,590 950,192

Sales of other

recycled commodities 964,599 871,383 1,566,484 1,328,959

Total 3,590,859 2,464,263 6,721,139 4,147,235

Revenues from service fees increased by $1,905,981 or 102% for the six months ended June 30, 2008 as compared to the six months ended June 30, 2007. Revenues from service fees for the three months ended June 30, 2008 increased by $923,492 or 89.6% over the comparable period in 2007. The increases in revenues from service fees during the three and six months ended June 30, 2008 over the comparable periods in 2007 resulted from an increase in the number of our customers for waste processing services, and increased demand for our services from existing customers.

Cost of Revenues

The Company’s cost of revenues for the three and six months ended June 30, 2008 were $1,091,402 and $2,019,495, compared with $853,677 and $1,363,445 for the three and six months ended June 30, 2007, respectively.

Three Months Ended Six Months Ended

June 30, June 30,

2008 2007 2008 2007

Cost of service fees 315,881 354,530 686,916 583,148

Cost of cupric sulfate 238,577 168,454 525,103 265,751

Cost of other recycled

commodities 536,944 330,693 807,476 514,546

Total 1,091,402 853,677 2,019,495 1,363,445

The cost of service fees for the six months ended June 30, 2008 increased by $103,768 or 17.8% compared to the six months ended June 30, 2007 due to increase in cost of raw materials.

The cost of reclaimed products (which includes cost of cupric sulfate and cost of other recycled commodities) for both the three and six months ended June 30, 2008 increased by 55.4% and 70.8%, respectively, compared with the same periods in 2007. Such increase is attributable to a sharp increase in the cost of raw materials.

Selling Expenses

Total selling expenses for the three months ended June 30, 2008 decreased by 32.7% over total selling expenses for the three months ended June 30, 2007 and decreased by 13.9% for the six months ended June 30, 2008 compared with the same period in 2007. The decreases in selling expenses were principally attributable to improved control over cost and expenses.

General and Administrative Expenses

Compared with the same period in 2007, general and administrative expenses for the six months ended June 30, 2008 increased by 15.2%, principally as a result of expanded business.

Foreign Currency Translation

Foreign currency translation adjustments for the six months ended June 30 2008 increased to $745,508 from $224,141 for the six months ended June 30, 2007. This fluctuation is attributable to the appreciation of the Chinese currency against the U.S. dollar.

Net Income

Net income for the three months ended June 30, 2008 increased by $682,800 or 99.4% to $1,369,792 from $696,992 for the three months ended June 30, 2007. Net income for the six months ended June 30, 2008 increased by $1,378,505 or 100.8% to $2,745,409 from $1,366,904 for the six months ended June 30, 2007. This increase is primarily attributable to the increase in both service fees and sales of recycled commodities (including sales of cupric sulfate), which is generated from widened customer base of the Company and improved gross profit margin in the first two quarters of 2008.

Liquidity and Capital Resources

We have financed our operations and met capital expenditure requirements primarily through cash provided by operating activities, and bank loans.

Short-term loan for the six months ended June 30, 2008 was $4,802,235 compared to $1,369,000 at December 31, 2007 due to additional bank borrowings to accelerate business expansion.

As of June 30, 2008, cash and cash equivalents of the Company increased $1,924,018 or 59% from $3,260,307 to $5,184,325 compared with that of December 31, 2007. This is attributable to increase in net cash provided by operating activities, and proceeds from bank loans. As of June 30, 2008, the Company had working capital of $3,281,872, compared to $2,345,626 as of December 31, 2007.

Cash Flow

June 30, June 30,

2008 2007

Net cash provided by operating

activities $2,052,849 $1,868,882

Net cash used in investing activities $(4,191,086) $(2,881,756)

Net cash provided by financing

activities $3,433,235 --

Net cash provided by operating activities totaled $ 2,052,849 for the six months ended June 30, 2008, compared to cash provided by operations of $ 1,868,882 for the six months ended June 30, 2007; an increase of $183,967 or 9.8% over the same period in the previous year.

Net cash used in investing activities for the six months ended June 30, 2008 increased by $1,309,330 or 45.4% compared to the same period in 2007. This increase is attributable to purchasing of property and equipment, and construction in progress.

Net cash provided by financing activities for the six months ended June 30, 2008 increased by $3,433,235 compared to the same period in 2007, due to short term borrowing.

Mr. Dong, Jinqing, CEO of CIWT, commented, "We are delighted to announce the Company’s second quarter results--$3.59 million in revenue and $1.37 million in net income. Our EPS has doubled for the first two quarters of 2008 compared with 2007." Mr. Dong continued: "As a natural consequence of the booming economy in China, pollution has become a major concern of both the government and the general public. We are facing more and more opportunities and we will keep focused on the environmental protection industry and use our best efforts to become the largest industrial waste management company in China. We believe that we have a bright future and we’ll be glad to share our achievement with all shareholders."

Conventions

For the convenience of the reader, amounts expressed in this report as United States dollars have been translated from Renminbi Yuan, the official currency of the People’s Republic of China, at the rate of USD$1.00 = RMB7.3046 quoted by The People’s Bank of China ("POBC") as of December 31, 2007; and at the rate of USD$1.00 = RMB_6.871 quoted by OANDA as of June 30, 2008. OANDA is a Delaware corporation providing internet foreign exchange rate at http://www.oanda.com . The Renminbi is not freely convertible into foreign currencies and currency translations at such exchange rates do not imply convertibility of Renminbi into U.S. Dollars or other currencies.

About China Industrial Waste Management, Inc.:

China Industrial Waste Management, Inc., through its 90%-owned subsidiary Dalian Dongtai Industrial Waste Treatment Co., Ltd., is engaged in the collection, treatment, disposal and recycling of industrial wastes principally in Dalian, China and surrounding areas in Liaoning Province. The Company provides waste disposal solutions to its more than 400 customers from facilities located in the Economic and Technology Development Zone, Dalian, PRC. Dalian Dongtai treats, disposes of and/or recycles a variety of industrial wastes through incineration, burial and/or water treatment, and recycles, processes and/or resells waste products for use as raw materials in the production of chemical and metallurgy products. In addition, Dalian Dongtai provides environmental protection services, technology consultation, pollution treatment services, and waste management design processing services.

Forward-Looking Statements:

This release includes "forward-looking statements." You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements contain such words as "may," "project," "might," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," or the negative or other variations thereof or comparable terminology. These forward-looking statements are based on current expectations and projections about future events. Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantified and, consequently, our actual performance may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors, as well as other factors described from time to time in our reports filed with the Securities and Exchange Commission: the timing and magnitude of technological advances; the prospects for future acquisitions; the effects of political, economic and social uncertainties regarding the governmental, economic and political circumstances in the People’s Republic of China, the possibility that a current customer could be acquired or otherwise be affected by a future event that would diminish their waste management requirements; the competition in the waste management industry and the impact of such competition on pricing, revenues and margins; uncertainties surrounding budget reductions or changes in funding priorities of existing government programs and the cost of attracting and retaining highly skilled personnel; our projected sales, profitability, and cash flows; our growth strategies; anticipated trends in our industries; our future financing plans; and our anticipated needs for working capital.

Forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

For further information, contact:

Ms. Guo Xin, CFO

Tel: +86-411-8581-1229

Email: hellenguo@chinaciwt.com

Mr. Zhang Dazhi, Company Secretary

Tel: +86-411-8259-5339

Email: darcy.zhang@chinaciwt.com

Web: http://www.chinaciwt.com

Source: China Industrial Waste Management, Inc.
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