Rino International Supplements its Fourth Quarter of 2009 Results

2010-04-06 09:02 718

DALIAN, China, April 6 /PRNewswire-Asia-FirstCall/ -- Rino International Corp. (Nasdaq: RINO), which through its subsidiaries and controlled affiliates (collectively, the "Company" or "RINO"), 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 is supplementing information provided during its 2009 fourth quarter and full year earnings conference call, which was held on April 1, 2010.

Backlog as of February 28, 2010 was $100.8 million and the breakdown associated with the backlog is as follows in the table. Backlog includes the $20.9 million build contract as of February 28, 2010 for two Semi-Dry Flue Gas Desulphurization ("FGD") Units with Shougang Jingtang Iron & Steel Co., Ltd., which is expected to be completed by September 30, 2010. The Company expects that 80% of this backlog amount will turn into revenue by the end of the second quarter.


Product Segment Amount

Desulphurization Systems $57.3 million

Wastewater Treatment $22.8 million

Anti-oxidation Systems $2.0 million

Sludge Treatment Systems $18.7 million

Total $100.8million

In its January 22, 2010 press release announcing the Shougang Jingtang Iron & Steel Co., Agreement (the "BOT Agreement"), the Company estimated gross margin for the build contract to be 38%. The revenue from performance of this BOT Agreement, as revenue from all other RINO projects, will be recognized by the percentage of completion method.

Once the construction phase of the BOT Agreement is completed and approved by the customer, RINO will commence this 10-year operating contract. The commencement date is expected to be in the fourth quarter of 2010. The BOT Agreement will generate annual revenue of approximately $8.24 million, which includes a pass-through for utility expenses estimated at $6.2 million. Management is evaluating the GAAP treatment of revenues and expenses for this BOT Agreement with its auditors and further details will be forthcoming. The Company estimates the contribution of this project to the pre-tax income of the Company will be approximately $900,000 annually.

For 2009, Selling, General and Administrative (the "SG&A") expenses totaled $16.9 million, a 21.5% increase over that of 2008. For the fourth quarter of 2009, SG&A totaled $2.8 million, slightly more than the $2.7 million reported in the fourth quarter of 2008. Throughout the year, the Company pays commissions to both sales people and project managers for securing, implementing and completing projects of an aggregate of roughly 5.5% to 6% of the total contract value, and these commissions vary on a quarter by quarter basis, which creates variances in SG&A. The fact that SG&A has not increased as fast as revenues exhibits leverage in RINO's operating model.

About RINO International Corporation

RINO International Corporation, through its direct and indirect subsidiaries, including Innomind Group Limited, Rino Investment (Dalian) Co., Ltd. ("Rino Investment") and Rino Investment's wholly owned subsidiary, Dalian Rino Heavy Industries Co., Ltd., together with Dalian Innomind Environment Engineering Co., Ltd., its contractually-controlled affiliate, Dalian RINO Environmental Engineering Science and Technology Co., Ltd. ("Dalian Rino") and Dalian Rino's wholly-owned subsidiaries, Dalian Rino Environmental Engineering Project Design Co., Ltd., Dalian Rino Environmental Construction & Installation Project Co., Ltd. and RINO Technology Corporation, 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. Additional information about the Company is available at the Company's website:

About Non-GAAP Financial Measures

To supplement our consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: adjusted operating income, adjusted net income and adjusted EPS (basic and diluted). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our "recurring core business operating results." We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between the two.

Cautionary Statement Regarding Forward-Looking Information

Certain statements in this press release and conference presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, about the Company. 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, the risks set forth "Risk Factors" contained in the Company's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

For more information, please contact:

For the Company:

Jenny Liu

Tel: +86-411-8766-2700


For Investors:

Matt Hayden, HC International, Inc.

Tel: 561-245-5155

Source: RINO International Corp.
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