-- Third Quarter Net Revenues Increase 572% to $17.6 million
-- Third Quarter Net Income Increases 773% to $4.3 million with
$0.24 in EPS
DALIAN, China, Nov. 20 /Xinhua-PRNewswire-FirstCall/ -- Jade Mountain Corporation (OTC Bulletin Board: JDMC), through its direct and indirect subsidiaries, including Dalian RINO Environmental Engineering Science and Technology Co., Ltd., a PRC company ("RINO"), designs, manufactures, installs and services proprietary and patented wastewater treatment, flue gas desulphurization equipment, in addition to high temperature anti-oxidation systems utilized principally by iron and steel manufacturers in the People’s Republic of China ("PRC"), today announced financial results for its third quarter, which ended September 30, 2007.
Net Revenues for the third quarter of 2007 increased 572.0 percent to $17.6 million compared to $2.6 million for the third quarter of 2006. The increase in net revenues was attributable to strong sales of Company’s new flue gas desulphurization systems and anti-oxidation systems, which equated to $12.4 million and $0.8 million respectively. Additionally, contract machining services also contributed to revenues.
Cost of revenues for the third quarter of 2007 was $10.3 million, yielding a gross profit of $7.4 million and gross margins of 41.8 percent, compared to $1.0 million in gross profit and a gross margin of 39.8 percent during the third quarter of 2006. The favorable variation in gross margins resulted from the contribution of royalty revenues in addition to higher capacity utilization and the integration of new machine tools in 2006.
Operating income for the third quarter of 2007 totaled $5.2 million, representing a 532.1 percent increase from the $0.8 million reported for the third quarter of 2006 and were directly related to the increase in revenues. Operating margins were 29.4 percent and 31.2 percent for the third quarter of 2007 and 2006, respectively.
For the third quarter of 2007, net income was $4.3 million, an increase of 773.1 percent from $0.5 million recorded during the third quarter of 2006, while earnings per share increased to $0.24 per share for the third quarter of 2007 compared to $0.03 per share for the third quarter of 2006, with both calculations being based on 17.9 million weighted average diluted shares. The Company incurred taxes of $0.7 million and $0.2 million for the third quarter of 2007 and 2006, respectively, which equated to an effective tax rate of 14.9 percent and 32.5 percent, respectively. The Company had 25.0 million shares outstanding on November 19, 2007.
“We are very pleased with our performance both for the third quarter and year to date. 2007 has proven to been an inflection point for our Company as we have leveraged our strong brand name, established customer base and recently implemented government regulations to deliver a significant increase in both revenues and profitability," stated Mr. Dejun Zou (David), Chief Executive Officer of Dalian RINO Environmental Engineering Science and Technology Co., Ltd. These results are the culmination of hard work, prudent planning and solid execution on behalf of our entire organization. The underlying growth dynamics and fundamentals in the environmental services industry provide further confirmation that we are properly positioned to capitalize on this opportunity on a go forward basis.”
Nine Month Results
For the nine months ended September 30, 2007, net revenues increased approximately 583 percent to $46.3 million compared to the same year ago period. Wastewater and desulphurization systems respectively accounted for 14.0 percent and 44.9 percent of revenues. Gross profit was $22.6 million for the first nine months of 2007, representing an increase of 620 percent from the first nine months of 2006. Gross margins were 48.7 percent for the first nine months of 2007 compared to 46.2 percent for the first nine months of 2006. Income from operations was $16.4 million for the first nine months of 2007, representing an increase of 518 percent over the first nine months of 2006. Operating margins were 35.5 percent for the first nine months of 2007 compared to 39.2 percent for the first nine months of 2006.
Net income was $11.6 million for nine months ended September 30, 2007, an increase of 567 percent, from the same period of 2006. This equated to earnings of $0.65 per share for the first nine months of 2007 compared to $0.10 per share for the first nine months of 2006 based on 17.9 million weighted average diluted shares outstanding in both respective periods.
Balance Sheet and Cash Flow discussion
The Company had a current ratio of 2.3 to 1 and $16.0 million in accounts receivable on September 30, 2007. The company reported $3.6 million in long term notes payable. For the first nine months of 2007, the Company used $2.8 million in cash for operations, the main variance from net income relating to increased receivables which are a function of the product mix, the timing of new product installations and a significant increase in revenues.
On October 12, 2007, subsequent to the quarter end the Company announced a private placement with $24.4 million in gross proceeds.
"I would like to thank all of the investors who participated in our recent private placement. This capital will be utilized to significantly expand our production capacity during the coming six to twelve months to meet customer demand which is being supported by industry consolidation and compliance with government regulations. Additionally, we are also optimistic about commercializing our new anti-oxidation equipment which will also generate recurring revenue through associated paint coating sales."
Conference Call
The Company will host a conference call to discuss 2007 third quarter financial results on Wednesday, November 21, 2007 at 9:00 a.m. EDT. Interested participants should call +1-888-469-6384 when calling within the United States or +1-480-629-9562 when calling internationally. There will be a playback available until 11:59 p.m. eastern time November 28, 2007. To listen to the playback, please call +1-800-406-7325 when calling within the United States or +1-303-590-3030 when calling internationally. Please use pass code 3804741 for the replay. This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link http://viavid.net/dce.aspx?sid=0000486A or at ViaVid’s website at http://www.viavid.net . The webcast can be accessed through December 21, 2007.
About Dalian RINO Environmental Engineering Science and Technology Co., Ltd.
RINO is a leading provider of environmental protection equipment for the iron and steel industry in China. Specifically, RINO designs, manufactures, installs and services proprietary and patented wastewater treatment, flue gas desulphurization equipment, and high temperature anti-oxidation systems, which are all designed to reduce either industrial pollution and/or energy utilization. RINO’s manufacturing facility maintains the ISO 9001 Quality Management System and ISO 14001 Environment Management System certifications, in addition to receiving numerous government and industry awards.
Cautionary Statement Regarding Forward Looking Information
This press release may contain forward-looking information about the Company, Innomind and RINO. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and statements which may include discussions of strategy, and statements about industry trends future performance, operations and products of each of the entities referred to above. Actual performance results may vary significantly from expectations and projections as a result of various factors, including without limitation and the risks set forth "Risk Factors" contained in the Company’s Current Report on Form 8-K filed on October 12, 2007.
-- FINANCIAL TABLES TO FOLLOW --
JADE MOUNTAIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2007
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 77,221
Accounts receivable, net
of allowances 15,971,323
Contracts in progress 3,231,272
Inventories, net 149,871
Other current assets and
prepaid expenses 8,985,151
Total Current Assets 28,414,838
PROPERTY AND EQUIPMENT, NET 10,468,380
OTHER ASSETS
Prepaid expenses (non-current) 103,091
Intangible assets, net 634,068
Land use rights, net 877,155
TOTAL ASSETS $ 40,497,532
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable $ 3,936,548
Other payables and accrued
liabilities 1,280,073
Notes payable 4,389,699
Due to a stockholder 466,766
Business tax payable 567,668
Income tax payable 49,357
Value added tax payable 1,623,520
Total Current Liabilities 12,313,631
LONG-TERM LIABILITIES
Notes payable - long term 3,591,572
Deferred tax liabilities 5,131,718
TOTAL LIABILITIES 21,036,921
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock ($0.0001
par value, 50,000,000
shares authorized, none
issued and outstanding as
of September 30, 2007) --
Common stock ($0.0001 par
value, 10,000,000,000
shares authorized,
17,899,643 shares issued
and outstanding as of
September 30, 2007) 1,790
Additional paid-in capital 3,858,452
Retained earnings
Unappropriated 14,540,690
Appropriated 326,556
Accumulated other
comprehensive gain 733,123
Total Stockholders’ Equity 19,460,611
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY $ 40,497,532
JADE MOUNTAIN CORPORATION AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(UNAUDITED)
For the three months ended For the nine months ended
September 30 September 30
2007 2006 2007 2006
Consolidated Consolidated
NET SALES
Contracts $ 17,530,259 $ 2,113,523 $ 36,813,217 $ 5,067,516
Services 65,807 501,651 9,380,179 1,331,953
Government grant 52,605 10,951 122,463 384,121
17,648,671 2,626,125 46,315,859 6,783,590
COST OF SALES
Cost of
contracts (10,124,392) (1,425,260) (21,990,789) (3,273,664)
Cost of services (13,635) (67,776) (1,358,474) (162,204)
Depreciation (140,452) (88,430) (398,580) (214,402)
(10,278,479) (1,581,466) (23,747,843) (3,650,270)
GROSS PROFIT 7,370,192 1,044,659 22,568,016 3,133,320
OPERATING EXPENSES
Selling, general
and
administrative
expenses 2,141,041 199,809 6,003,380 402,178
Depreciation 29,769 21,927 83,865 63,147
Amortization of
intangible
assets 12,072 -- 30,399 --
Amortization of
land use rights 2,932 2,782 8,674 8,303
Total Operating
Expenses 2,185,814 224,518 6,126,318 473,628
INCOME FROM OPERATIONS 5,184,378 820,141 16,441,698 2,659,692
OTHER INCOME (EXPENSES)
Other income 86 4,494 5,226 4494
Interest income 630 201 3,050 530
Imputed interest (6,987) (6,336) (31,005) (19,491)
Interest
expenses (170,769) (83,021) (456,881) (224,823)
Other expenses (387) (12,188) (3,574) (12,474)
Total Other
Expenses, net (177,427) (96,850) (483,184) (251,764)
INCOME FROM OPERATIONS
BEFORE TAXES 5,006,951 723,291 15,958,514 2,407,928
INCOME TAX EXPENSE (744,149) (235,072) (4,358,165) (667,856)
NET INCOME 4,262,802 488,219 11,600,349 1,740,072
OTHER COMPREHENSIVE
INCOME
Foreign currency
translation
gain 249,954 84,881 535,845 101,962
COMPREHENSIVE INCOME $ 4,512,756 $ 573,100 $ 12,136,194 $ 1,842,034
LOSS PER SHARE
- Basic and diluted $ 0.24 $ 0.03 $ 0.65 $ 0.10
WEIGHTED AVERAGE NUMBER
OF SHARES
- Basic and diluted 17,899,643 17,899,643 17,899,643 17,899,643
For more information, please contact:
For the Company:
Bruce Richardson
Tel: +86-411-8766-1233
Email: bruce.richardson@rinogroup.com
Investors:
HC International, Inc.
Tel: +1-858-704-5065
Email: info@hcinternational.net
