Net Sales Increase 94.5% to $19 Million and Net Income Increases 47.3% to $5 Million
Management to Host Earnings Conference Call Friday, May 16th at 10 a.m. ET
DALIAN, China, May 16 /Xinhua-PRNewswire/ -- RINO International Corp. (OTC Bulletin Board: RINO), through its direct and indirect subsidiaries, including Innomind Group Limited and Dalian Innomind Environment Engineering Co., Ltd. (“Innomind”) and a contractually controlled affiliate, Dalian RINO Environmental Engineering Science and Technology Co., Ltd., a PRC company that designs, manufactures, installs and services proprietary and patented wastewater treatment, desulphurization equipment, and high temperature anti-oxidation systems for iron and steel manufacturers in the People’s Republic of China ("PRC"), today announced its un-audited financial results for the first quarter of 2008 which ended March 31, 2008.
SUMMARY FINANCIALS
Q1 2008 Q1 2007
Net Sales $19 million $9.8 million
Gross Profit $7.7 million $4.9 million
Net Income $5.0 million $3.4 million
EPS (Fully Diluted) $0.20 $0.19
First Quarter of 2008 Results (Unaudited):
Net sales for the first quarter of 2008 increased 94.5% to $19 million compared to $9.8 million for the same quarter in 2007. Revenue growth was driven in large part by increased sales of sinter flue gas desulphurization equipment, which rose to $12.5 million, or 294% over levels achieved in first quarter 2007. During the quarter, the company recorded $2.2 million in wastewater treatment equipment sales, $1.6 million in anti-oxidation equipment and coatings, and $2.7 million in machining services. Sales revenue for all categories rose substantially compared to the first quarter of 2007, with the exception of technical consulting services which were discontinued as production capacity rose.
“Despite the first quarter being the slowest of the year due to the Chinese New Year, we continued to experience positive momentum in all aspects of our business. We completed and began installations for new desulphurization systems and water treatment systems, in addition to anti-oxidation equipment for both existing and new customers,” Mr. Zou Dejun, President and CEO of Dalian RINO, further elaborated.
Quarterly gross profit for the first quarter of 2008 was $7.7 million, compared to $4.9 million for the same period last year, yielding gross margins of 40.5% and 50.0% respectively. Gross margins for the first quarter of 2007 were favorably impacted by a licensing agreement for production of desulphurization systems which was not present in 2008. Operating expenses for the first quarter were $2.2 million compared to $1.3 million for the same period last year, mainly a function of increased revenue and management’s decision to expand the organization to accommodate future growth while targeting larger contracts. Operating margins were 29.0% compared to 36.4% for the first quarter of 2008 and 2007, respectively.
The Company recorded an additional provision of $500,000 for liquidated damages. Liquidated damages accrue at a monthly rate of just under $244,803 for each month or portion of the month that the Company’s registration statement is not made effective, subject to a cap of approximately $2.5 million, or 10% of total funds raised in October, 2007.
Net income for the first quarter of 2008 increased 47.3% to $5.0 million from $3.4 million in the same year ago period. The company did not incur income taxes in either quarter as Dalian Innomind’s tax holiday under prior PRC income tax law was extended, and Dalian RINO qualifies for a tax exemption as an environmental protection enterprise under current PRC income tax law. Earnings per diluted share were $0.20 compared to $0.19 based on 25.2 million and 17.9 million diluted shares outstanding. The variance in shares relates to the capital raise and public merger which were effectuated in October of 2007.
“This quarter’s gross margins were consistent with our target of between 40-45% considering our current product mix. We did deliver a significant increase in net income despite incremental costs incurred to expand the breadth and depth of our organization, which is geared to accommodate future growth,” commented Bruce Richardson, RINO International Corp.’s Chief Financial Officer.
Balance Sheet:
Cash and cash equivalents and restricted cash totalled $11.1 million on March 31, 2008 compared to $8.4 million on December 31, 2007. The Company had $36.1 million in working capital on March 31, 2008 and a current ratio of 2.9 to 1. The accounts receivable balance was $25.3 million on March 31, 2008, compared to $20.8 million on December 31, 2008 and annualized days sales outstanding for the first quarter of 2008 was 109 days. Net cash provided by operating activities for the quarter was $0.2 million.
“Our customer pipeline has never been stronger as we are seeing broad based interest for our desulphurization system technology, which is specifically developed to filter Flue Gas from the Sinter. We believe the strict government regulations put in place and follow-on enforcement is providing the necessary impetus for adoption. Additionally, RINO is currently bidding on projects which are considerably larger than any we have won to date and provide an indication that this potential market may actually be larger than we initially anticipated. We continue to develop new Cleantech products which are complementary to our current product suite with a focus on considerably reducing emissions while also improving energy utilization and operating efficiency,” Mr. Zou concluded.
Recent Events
-- On April 29, 2008 the board of directors engaged Moore Stephens Wurth
Frazer & Torbet, LLP as the Company’s independent auditors.
-- Effective May 19, 2008 the company changed its name from Jade Mountain
Corporation to “RINO International Corporation”.
-- On May 13, 2008 the Company began trading under a new ticker “RINO”
on the OTC Bulletin Board.
Conference Call Information:
The conference call will take place at 10:00 a.m. ET on Friday, May 16, 2008. Interested participants should call 800-762-8779 when calling within the United States or 480-629-9031 when calling internationally. A playback will be available through May 23, 2008. To listen, please call 800-406-7325 within the United States or 303-590-3030 when calling internationally. Utilize the pass code 3879191 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=000050E1 or at ViaVid’s website at http://www.viavid.net, where the webcast can be accessed through June 16, 2008.
About RINO International Corporation
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 improve 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 upcoming conference call 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.
For more information, please contact:
For the Company:
Bruce Richardson
Tel: +86-411-8766-1233
Email: bruce.richardson@rinogroup.com
Investors:
Matt Hayden
HC International, Inc.
Tel: +1-561-245-5155
Email: matt.hayden@hcinternational.net
- Tables Follow -
RINO INTERNATIONAL CORPORATION AND SUBSIDIARIES
(FORMERLY KNOWN AS JADE MOUNTAIN CORPORATION)
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2008 AND DECEMBER 31, 2007
A S S E T S
March 31, 2008 December 31, 2007
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $6,147,346 $ 7,390,631
Restricted cash 4,991,412 1,000,000
Accounts receivable 25,271,971 20,840,336
Notes receivable 952,087 202,670
Costs and estimated earnings in
excess of billings 1,049,322 2,818,122
Inventories 244,323 178,480
Advances for inventory purchase 14,754,199 13,372,629
Other current assets and prepaid
expenses 1,685,924 1,174,464
Total current assets 55,096,584 46,977,332
PROPERTY AND EQUIPMENT, NET 11,426,247 11,000,581
OTHER ASSETS
Prepaid expenses (non-current) 89,250 95,706
Advances for equipment and
construction material purchase 6,219,083 2,470,916
Intangible assets, net 1,674,283 1,618,590
Total other assets 7,982,616 4,185,212
Total assets $74,505,447 $ 62,163,125
L I A B I L I T I E S A N D S H A R E H O L D E R S' E Q U I T Y
CURRENT LIABILITIES
Accounts payable $2,160,540 $ 2,534,858
Liquidated damages payable 1,500,000 1,000,000
Other payables and accrued
liabilities 830,810 802,245
Notes payable 2,392,052 --
Sales commission payable 786,561 --
Due to a stockholder 79,753 106,963
Other taxes payable (56,465) 581,444
Income tax payable 1,233,524 5,970,794
Value added tax payable 2,937,899 2,989,365
Short-term loan 7,140,000 --
Total current liabilities 19,004,674 13,985,669
COMMITMENTS AND CONTINGENCIES -- --
SHAREHOLDERS' EQUITY
Preferred Stock ($0.0001 par value,
50,000,000 shares authorized,
none issued and outstanding) -- --
Common Stock ($0.0001 par value,
10,000,000,000 shares authorized,
25,000,000 shares issued and
outstanding as of March 31, 2008
and December 31, 2007) 2,500 2,500
Additional paid-in capital 32,742,048 32,701,982
Retained earnings 15,841,263 11,376,163
Statutory reserves 2,664,785 2,109,539
Accumulated other comprehensive
income 4,250,177 1,987,272
Total shareholders' equity 55,500,773 48,177,456
Total liabilities and
shareholders' equity $74,505,447 $ 62,163,125
RINO INTERNATIONAL CORPORATION AND SUBSIDIARIES
(FORMERLY KNOWN AS JADE MOUNTAIN CORPORATION)
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(UNAUDITED)
2008 2007
REVENUES:
Contracts $19,045,425 $7,189,479
Services -- 2,600,842
19,045,425 9,790,321
COST OF SALES
Cost of contracts 11,165,083 4,380,774
Cost of services -- 389,932
Depreciation 157,775 120,484
11,322,858 4,891,190
GROSS PROFIT 7,722,567 4,899,131
OPERATING EXPENSES
Selling, general and
administrative expenses 2,145,491 1,297,348
Depreciation 32,605 26,526
Amortization 15,914 11,464
Reasearch and development 10,483 --
TOTAL OPERATING EXPENSES 2,204,493 1,335,338
INCOME FROM OPERATIONS 5,518,074 3,563,793
OTHER INCOME (EXPENSE), NET
Other income 73,377 --
Interest income 21,926 1,643
Interest expenses (78,704) (153,857)
Liquidated damage expense (500,000) --
Other expenses (14,327) (2,623)
TOTAL OTHER EXPENSES (497,728) (154,837)
INCOME BEFORE PROVISION FOR INCOME
TAXES 5,020,346 3,408,956
PROVISION FOR INCOME TAXES -- --
NET INCOME 5,020,346 3,408,956
OTHER COMPREHENSIVE INCOME:
Foreign currency translation
adjustment 2,262,905 (364,264)
COMPREHENSIVE INCOME $7,283,251 $3,044,692
WEIGITED AVERAGE NUMBER OF SHARES:
Basic 25,000,000 17,899,643
Diluted 25,161,062 17,899,643
EARNINGS PER SHARE:
Basic $0.20 $0.19
Diluted $0.20 $0.19
