BEIJING, Nov. 13 /PRNewswire-Asia/ -- China Solar & Clean Energy Solutions, Inc. (Formerly known as "Deli Solar (USA), Inc.") (OTC Bulletin Board: CSOL) ("China Solar"), a manufacturer and distributor of solar water heaters, space heating devices and provider of renewable energy solutions in the People's Republic of China ("PRC"), today reported its financial results for the third quarter ended September 30th, 2009 and announced the establishment of strategic alliance with KOE Environmental Consulting, Inc. (Japan).
Third Quarter 2009 Results
Net revenue was $5.3 million for the three months ended September 30, 2009, a decrease of 69.2% as compared to $17.3 million for the same period last year of 2009. The decrease in the net revenue is primarily due to the disposal of Shenzhen Pengsangpu Solar Industrial Products Corporation ("SZPSP") and continuous decrease in the sales of single solar products such as solar heater and biomass stove in Deli Solar (Bazhou). Sales for industrial energy-saving projects in Tianjin Huaneng remains robust in the second and the third quarter of this year, but the industrial projects usually take three to six months to complete and the revenue for these projects is expected to be shown on the financial statements for the fourth quarter of 2009 and the first quarter of 2010.
Net income was $45,646 for the three months ended September 30, 2009, with diluted earnings per share (EPS) of $0.01. For the second quarter of 2009, the net income is $1.09 million with diluted earnings per share of $0.07. For the first quarter of 2009, the net loss was $0.94 million with diluted loss per share at $(0.07). The turnaround from net loss to net income in the second and third quarters is primarily due to the disposal of SZPSP, which had been a major drag on profits for the first quarter of 2009.
Cash and cash equivalents increased to $3.6 million as of September 30, 2009, primarily attributable to the $1.4 million of cash returned as part of the divestiture of SZPSP during the quarter. The cash and cash equivalents was $2.7 million as of June 30, 2009.
Operating expenses was $1.2 million, as compared to $2.6 million for the three months ended September 30, 2008, a decrease of $1.4 million, or 53.8%. The overall decrease in operating expenses was primarily due to strengthening cost control since the start of 2009.
Mr. Deli Du, Chief Executive Officer of China Solar, commented, "Despite the financial crises, our pipeline for industrial and real estate energy-saving projects remains healthy, which is a strong credential of our unparallel capability of providing solutions properly tailored for the Chinese market. We are managing our operations well, while controlling costs and improving our services to international standards," said Mr. Du. "Our ongoing strategy of a transition from a product manufacturer and distributor to a renewable energy solutions provider has positioned China Solar to capitalize on the growth opportunities in the burgeoning Chinese renewable energy market. I am confident that China Solar will soon achieve solid business growth to serve the best interests of our shareholders."
Strategic Alliance with KOE Environmental Consulting (Japan)
On November 9, 2009, China Solar entered into a strategic alliance agreement with KOE Environmental Consulting Inc. (Japan), a consulting firm which helps Japanese environmental investment institutions to identify suitable projects under the Kyoto Protocol's Clean Development Mechanism ("CDM").
Under the terms of the strategic alliance agreement, China Solar and KOE will work together to identify and develop potential CDM projects across the industrial and real estate energy saving projects of China Solar, go through the UNFCCC ("United Nations Framework Convention on Climate Change") registration process and trade the Certified Emission Reduction ("CER") and Verified Emission Reduction ("VER") credits thus generated.
"The strategic alliance will pioneer the development of CDM in one of the world's most carbon intensive countries," commented Mr. Du. "KOE and China Solar are ideally placed to jointly pursue the CDM opportunities in China. I am confident that KOE's strong expertise and extensive experience in CDM projects will help discover and create value for China Solar."
About China Solar & Clean Energy Solutions, Inc.
China Solar & Clean Energy Solutions, Inc. is a provider of integrated clean technology and renewable energy solutions in the People's Republic of China. The Company sells and distributes hot water and space heating devices along with waste heat recovery systems via its subsidiaries including Bazhou Deli Solar Energy Heating Co. Ltd. ("Deli Solar (Bazhou)"), Beijing Deli Solar Technology Development Co., Ltd. and Tianjin Huaneng Group. 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 under the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. 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.
For more information, please contact:
China Solar & Clean Energy Solutions, Inc.
Peggy Yuan
Director, Investor Relations
Tel: +86-10-6386-0500
Email: ir@delienergy.com
CHINA SOLAR & CLEAN ENERGY SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Currency expressed in United States Dollars ("US$"), except for number
of shares)
September 30, 2009 December 31, 2008
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $3,587,364 $1,820,882
Accounts receivable, net 7,512,359 5,962,051
Inventories 2,892,074 5,158,153
Other receivables and prepayments 6,929,358 6,705,578
Total current assets 20,921,155 19,646,664
Property and equipment, net 14,145,114 13,955,691
Goodwill 1,911,320 2,284,903
Intangible assets, net 1,664,096 1,709,184
Assets of discontinued operations 8,972,481
TOTAL ASSETS $38,641,685 $46,568,923
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $1,944,999 $1,148,428
Tax payable 1,539,204 1,822,867
Other payables and accrued
liabilities 5,190,508 7,296,294
Employee loan 1,324,879 1,474,085
Total current liabilities 9,999,590 11,741,674
Long-term liabilities:
Deferred tax liabilities 15,779
Liabilities of discontinued
operations 4,182,671
Stockholders' equity
Convertible preferred stock: par
value $0.001, 25,000,000 shares
authorized, zero and 373,566 shares
issued and outstanding, respectively 373
Common stock, $0.001 par value,
66,666,667 shares authorized,
14,233,652 and 13,799,450 shares
issued and outstanding, respectively 14,233 13,799
Additional paid-in capital 22,506,055 22,966,404
Accumulated other comprehensive loss 696,701 1,615,081
Retained earnings 3,587,603 3,365,788
Profit earning reserves 963,106
Total china solar stockholders'
equity 26,804,592 28,924,551
Non-controlling interest in
subsidiary 1,837,503 1,704,248
Total equity 28,642,095 30,628,799
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $38,641,685 $46,568,923
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Currency expressed in United States Dollars ("US$"), except for number of
shares)
(Unaudited)
Three months ended September 30,
2009 2008
Revenue, net $5,344,923 $17,349,436
Cost of revenue 4,032,539 13,152,373
Gross profit 1,312,384 4,197,063
Operation Expenses
Depreciation and amortization 69,294 183,216
Selling and distribution 526,874 1,408,844
General and administrative 594,489 983,896
Total operating expenses 1,190,657 2,575,956
Income from operations 121,727 1,621,107
Other income (expenses):
Other income 40,691 210,275
Interest income 664 --
Other expense (3,366) (42,662)
Reversal of reserve for bad debts 3 --
Interest expense (77,792) (69,192)
Total other (expense) income (39,800) 98,421
Income from continuing operations
before income taxes 81,927 1,719,528
Income tax expense 8,042 458,820
Net income from continuing operation
including non controlling interest 73,885 1,260,708
Net income (loss) from discontinued
operation net of tax -- 448,362
Gain on sale of discontinued
operations net of tax --
Net income 73,885 $1,709,070
Less: Net income attributable to non
controlling interest 28,239 69,869
Net income attributable to
controlling interest $45,646 $1,639,201
Basic
Continued operation 0.00 $0.09
Discontinued operation 0.00 $0.03
Gain on sale of discontinued
operation 0.00 $0.00
0.00 0.13
Diluted
Continued operation 0.00 $0.08
Discontinued operation 0.00 $0.03
Gain on sale of discontinued
operation 0.00 $0.00
0.00 0.11
Weighted average shares outstanding -
basic 14,652,826 13,586,827
Weighted average shares outstanding
-diluted 16,552,826 15,173,016
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Currency expressed in United States Dollars ("US$"))
(Unaudited)
Nine months ended September 30,
2009 2008
Cash flows from operating activities:
Net effect of discontinued operation $ $(76,168)
Net cash provided by operating
activities 705,573 (2,919,100)
Net cash provided by(used in)
operating activities 705,573 (2,995,268)
Cash flows from investing activities:
Proceeds from non-controlling
shareholder (3,916,212)
Disposal subsidiary 1,390,593
Purchase of property, plant and
equipment (450,019) (3,269,871)
Payment for other intangible assets (852,163)
Net effect of discontinued operation (80,606)
Net cash provided by/used in
investing activities 940,575 (8,118,852)
Cash flows from financing activities:
Acquisition of an investment 51,532
Proceeds from private placement sale
of stock 9,995,156
Proceeds from warrants exercised 312,430
Net effect of discontinued
operation (204,930)
Net cash provided by financing
activities 51,532 10,102,656
Effect of exchange rate on cash and
cash equivalents 69,102 192,214
NET CHANGE IN CASH AND CASH
EQUIVALENTS 1,766,482 (819,250)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 1,820,882 5,466,637
CASH AND CASH EQUIVALENTS, END OF
PERIOD $3,587,364 $4,647,387
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid for income taxes $221,970 $441,015
Cash paid for interest expense $118,921 $--
NONCASH INVESTING AND FINANCING
TRANSACTIONS:
Issuance of common stock for
acquisition of SZPSP 2,839,458
Issuance of warrants for the
acquisition of SZPSP 92,193
Preferred share converted 373,000 1,201
