-- Revenue Increases 74% to $22 Million --
-- Net Income Increases 228% to $1.6 Million --
BEIJING, Nov. 18 /PRNewswire-FirstCall/ -- China Solar & Clean Energy, Inc. (OTC Bulletin Board: CSOL; "CSOL"), a premier manufacturer and distributor of solar water heaters, renewable energy solutions, and space heating devices in the People's Republic of China, today announced its financial results for the quarter ended September 30, 2008.
Revenue increased by approximately $9.3 million, or 74%, to $21.9 million for the fiscal quarter ended September 30, 2008, from $12.6 million in the same period in 2007. All of the Company's business segments contributed to the growth. Revenue from solar heater and boiler products increased 28% to approximately $11.3 million for the third quarter of 2008 as compared to $8.8 million for the same period last year. Heat-pipe product revenue was $6.0 million for the third quarter of 2008, an increase of 58% from $2.2 million in the prior year period. Relative to energy saving projects, as the acquisition of Shenzhen Pengsangpu Solar Industrial Products (SZPSP) was completed on April 1, 2008 the Company did not record any revenue in this business segment in 2007. For the third quarter of 2008 revenue from energy saving projects was $4.6 million. For the nine months ended September 30, 2008, sales revenue increased 95% to $48.8 million, compared to $25.0 million in the prior year period. In addition to the acquisition of Shenzhen Pengsangpu, the increase in revenue is attributable to the continued increase in demand for the Company's products.
Gross profit increased by approximately $2.3 million, or 91%, to $4.9 million for the third quarter of 2008 from $2.6 million for the same period in 2007. Gross profit as a percentage of revenue was 22.2% for the third quarter of 2008, an increase of 200 basis points from 20.2% in the same period in 2007. The increase in gross margin was largely a result of increasing margins for heat-pipe products as well as the increase in overall heat-pipe revenue. For the nine-month period, gross profit increased 125% to $11.8 million, compared to $5.2 million in the prior year period.
Operating expenses increased 57% from $1.8 million in the third quarter of 2007 to $2.8 million in 2008. Operating expenses as a percentage of sales decreased to 12.7% as compared to 14.0% in the prior year period. For the nine-month period, operating expenses increased 90% to $6.4 million as compared to $3.4 million in the prior year period. While the increase in operating expenses was the result of a general increase in the Company's business level, the decrease in operating expenses as a percentage of sales was a result of economies of scale resulting from the Company's growth.
Operating Income increased 167% to $2.1 million for third quarter of 2008 from $0.8 million in the same period in 2007. As a percentage of sales, operating income was 9.5% as compared to 6.2% in the prior year period. For the nine-month period, operating income increased 190% to $5.3 million as compared to $1.8 million in the prior year period. The increase in operating margin was a result of the improvement in gross margin and decrease in operating expenses as a percentage of sales.
Net income for the three months ended September 30, 2008 was $1.6 million, an increase of 228% from $0.5 million in the prior year period. For the third quarter of 2008 earnings available to common shareholders on a fully diluted basis was $0.11 as compared to $0.06 in the prior year period, an increase of 83%. For the nine months ended September 30, 2008, net income increased 120% to $3.1 million as compared to $1.4 million in the prior year period. Earnings available to common shareholders on a fully diluted basis increased from $0.06 to $0.23 per share, an increase of 283%.
"The third quarter of 2008 was another highly successful quarter for China Solar & Clean Energy Solutions," stated Mr. Deli Du, Chief Executive Officer of China Solar & Clean Energy Solutions. "We recorded excellent growth in both solar heater and boiler products and heat-pipe products and saw our most recently acquired subsidiary, Shenzhen Pengsangpu, have an excellent quarter as well. Furthermore, we experienced margin improvement at all levels, with gross margins increasing by 2% and operating expenses as a percentage of sales decreasing by more than 1%. The end result of the growth and the margin improvement was a more than 3-fold increase in net income and an 83% increase in diluted earnings per share. We believe this quarter is further evidence that our strategy of acquiring innovative, competitive alternative energy solutions companies at reasonable prices and enhancing their performance via improvements in distribution, marketing, and general management is an excellent way by which to build a highly successful company that benefits from one of today's most important global trends-the need to find new sources of energy."
About China Solar & Clean Energy Solutions, Inc.
China Solar & Clean Energy Solutions, Inc. operates through its subsidiaries Bazhou Deli Solar Energy Heating Co. Ltd. ("Deli Solar (Bazhou)"), Beijing Deli Solar Technology Development Co., Ltd., Tianjin Huaneng Group, and Shenzhen Peng Sang Pu Co., Ltd., all located in the PRC. The Company manufactures and distributes various forms of alternative energy systems including solar thermal systems for hot water and space heating, industrial heat recovery systems, and solar-powered lighting devices. For more information, please visit http://www.delisolar.com .
Safe Harbor Statement:
Certain statements in this news release may contain forward-looking information about China Solar & Clean Energy Solutions and its subsidiaries business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, market and customer acceptance and demand for products, ability to market products, fluctuations in foreign currency markets, the use of estimates in the preparation of financial statements, the impact of competitive products and pricing, the ability to develop and launch new products on a timely basis, the regulatory environment, fluctuations in operating results, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company's reports filed with the Securities and Exchange Commission. China Solar & Clean Energy Solutions undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
CHINA SOLAR & CLEAN ENERGY SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Currency expressed in United States Dollars ("US$"),
except for number of shares
September 30, December 31,
2008 2007
ASSETS (Unaudited) (Note 1)
Current assets:
Cash and cash equivalents $ 4,647,387 $ 5,466,637
Accounts receivable, net 8,971,587 7,453,009
Inventories 6,746,185 3,875,658
Other receivables and prepayments 6,353,350 1,637,948
Total current assets 26,718,510 18,433,252
Plant and equipment, net 12,903,938 8,819,216
Goodwill 4,705,591 1,789,324
Intangible assets, net 2,450,084 1,597,921
Customer relationships, net 1,045,000 --
Intellectual property - unpatented
technology, net 893,000 --
TOTAL ASSETS $ 48,716,122 $ 30,639,713
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 1,875,042 $ 2,111,028
Income tax payables 1,538,863 1,108,433
Other payables and accrued
liabilities 8,021,159 8,552,452
Total current liabilities 11,435,064 11,771,913
Long-term liabilities
Deferred tax liabilities 875,640 --
Minority interests 1,960,344 935,825
Stockholders' equity:
Convertible preferred stock: par
value $0.001, 25,000,000 shares
authorized, 573,566 (unaudited)
and 1,774,194 shares issued and
outstanding, respectively $ 574 $ 1,774
Common stock, $0.001 par value,
66,666,667 shares authorized,
13,599,450 (unaudited) and 6,205,690
shares issued and outstanding,
respectively 13,599 6,205
Additional paid-in capital 22,303,913 9,260,607
Accumulated other comprehensive
income 1,472,805 1,134,270
Retained earnings 10,654,183 7,529,119
Total stockholders' equity 34,445,074 17,931,975
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 48,716,122 $ 30,639,713
CHINA SOLAR & CLEAN ENERGY SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Currency expressed in United States Dollars ("US$"),
except for number of shares
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2008 2007 2008 2007
Revenue, net $21,916,642 $12,629,636 $48,846,916 $25,043,660
Cost of revenue 17,050,868 10,078,609 37,069,100 19,817,653
Gross profit 4,865,774 2,551,027 11,777,816 5,226,007
Operation Expenses
Depreciation
and
amortization $183,216 $82,731 $464,599 $153,697
Selling and
distribution 1,440,357 583,166 3,060,961 864,698
General and
administrative 719,601 532,137 1,602,809 987,093
Advertising 191,615 458,652 640,645 1,118,745
Salaries
and benefit 242,813 111,656 667,964 260,649
Total
operating
expenses 2,777,602 1,768,342 6,436,978 3,384,882
Other income
(expenses):
Other income 210,275 -- 277,106 --
Interest
income -- -- -- --
Other
expense (42,662) -- (86,291) --
Interest
expense (79,379) (31,845) (223,075) (30,207)
Total other
(expense)
income 88,234 (31,845) (32,259) (30,207)
Income before
income taxes 2,176,406 750,840 5,308,578 1,810,918
Income tax
expenses 467,336 189,770 1,254,614 327,747
Minority
interest 69,869 61,996 928,900 61,996
NET INCOME $1,639,201 $499,074 $3,125,064 $1,421,175
Computation
of income
available
to common
stockholders:
Net Income 1,639,201 499,074 3,125,064 1,421,175
Preferred
stock
beneficial
conversion -- -- -- (975,807)
NET INCOME
AVAILABLE
TO COMMON
STOCKHOLDERS $1,639,201 $499,074 $3,125,064 $445,368
Net income
(loss) per
share - basic $0.12 $0.08 $0.27 $0.07
Net income
(loss) per
share - diluted $0.11 $0.06 $0.23 $0.06
Weighted
average
shares
outstanding
- basic 13,586,827 6,205,290 11,651,656 6,205,290
Weighted
average
shares
outstanding
- diluted 15,173,016 8,310,856 13,800,196 7,039,341
For more information, please contact:
Dan Joseph
ICR, Inc.
Tel: +86-21-6122-1077
Bill Zima
ICR, Inc.
Tel: +1-203-682-8200
