BEIJING, November 16, 2012 /PRNewswire/ -- Wowjoint Holdings Limited ("Wowjoint," or the "Company") (OTCQB: BWOWF), China's innovative infrastructure solutions provider of customized heavy duty lifting and carrying machinery, today reported financial results for the third quarter 2012.
Third Quarter Ended September 30, 2012
Cost of sales for the three months ended September 30, 2012 was approximately $1.0 million compared to $4.0 million for the three months ended September 30, 2011. The lower cost of sales in third quarter 2012 was due to a higher percentage of leasing revenue, 23% in Q3 2012 compared to 5% in Q3 2011, which enjoys a higher gross margin. Operating expenses for the three months ended September 30, 2012 were approximately $1.3 million compared to $1.0 million for the same period in 2011. The third quarter 2012 reflects additional R&D expenses related to new projects and new products. Selling expenses for the three months ended September 30, 2012 totaled $0.2 million, which is relatively flat compared to the same period of 2011.
"Our gross margins remain strong and this quarter's increase was directly due to the diversification of our sales, specifically our leasing and international contracts, which provide a higher gross margin," commented Mr. Yabin Liu, Chairman and Chief Executive Officer of Wowjoint. "We continue to focus on our International sales and our leasing and service businesses to maintain strong gross margins. During this quarter we were pleased to announce new contracts, which include leasing service and additional expansion into the marine hoist industry. We are also pleased that our recent contracts in the Peru and Malaysia markets are progressing well and we believe future business will develop in these markets."
Balance Sheet as of September 30, 2012
Nine Months Ended September 30, 2012
Cost of sales for the nine months ended September 30, 2012 was approximately $2.7 million compared to $15.2 million for the nine months ended September 30, 2011. Operating expenses for the nine months ended September 30, 2012 were approximately $4.1 million compared to $3.0 million for the same period in 2011, due to increased R&D expenses related to new projects and new products. Selling expenses for the nine months ended September 30, 2012 totaled $0.9 million compared to $0.8 million in the same period of 2011.
Business Updates
Wowjoint continues to pursue international contracts and diversify its business. During the third quarter 2012 and recently, the Company participated in three industry conferences in the US, two of which focused on precast and segmental bridge development and one on high-speed rail. At the ASBI Conference in Adventura, Florida, Wowjoint presented to over 350 people, representing various companies in the segmental bridge industry, on the Company's technology and the use of full span method construction. These conferences provided for additional exposure to the US market and generated relationships that the company plans to pursue. In addition, Wowjoint conducted a US sales road show to further develop its business relationships. The Company plans to execute additional sales road shows throughout South East Asia and Latin America in the coming months, in which key sales managers will attend to facilitate the development of potential customers.
"We're pleased with the potential that we have in the International infrastructure project landscape. In addition, we are also experiencing an increased interest in leasing and servicing both in China and in our International markets," stated Mr. Liu. "We continue to experience a reduction in China's infrastructure spending, although projects still remain in the Chinese government's stimulus plan and it's believed that the reduction is based on timing of those projects. Wowjoint has signed new contracts since the beginning of 2012, with a substantial percentage of which are in leasing, technical services or International markets."
Revenue Guidance and Contract Backlog
Management issued revenue guidance for the fourth quarter of 2012 of approximately $2 to $3 million. As of September 30, 2012, Wowjoint's backlog of signed contracts totaled approximately $19.74 million.
About Wowjoint Holdings Limited
Wowjoint is a leading provider of customized heavy duty lifting and carrying machinery used in large scale infrastructure projects such as railway, highway and bridge construction. Wowjoint's main product lines include launching gantries, tyre trolleys, special carriers, marine hoists and special purpose equipment. The Company's innovative design capabilities have resulted in patent grants and proprietary products. Wowjoint believes it is well-positioned to benefit directly from China's rapid infrastructure development by leveraging its extensive operational experience and long-term relationships with established blue chip customers. Information on Wowjoint's products and other relevant information are available on its website at www.wowjoint.com.
Forward Looking Statements
This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. Forward-looking statements in this press release include matters that involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Wowjoint undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after the date of this communication. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. All forward-looking statements are qualified in their entirety by this cautionary statement. All subsequent written and oral forward-looking statements concerning Wowjoint or other matters and attributable to Wowjoint or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Wowjoint does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this news release.
For additional information contact:
Wowjoint Holdings:
Aubrye Foote, Vice President, Investor Relations
Tel: +1-530-475-2793
Email: aubrye@wowjoint.com
Website: www.wowjoint.com
- Financial Tables Follow -
WOWJOINT HOLDINGS LTD | ||||||
Unaudited Consolidated Statement of Income | ||||||
(US dollars in thousands, except for EPS and share data) | ||||||
Three Months Ended | Nine Months Ended | |||||
September 30, | June 30, | September 30, | September 30, | September 30, | ||
Sales | ||||||
Machinery sales | 1,159 | 1,127 | 4,906 | 2,371 | 18,488 | |
Technical service | 0 | - | 167 | 0 | 1,124 | |
Lease income | 351 | 231 | 282 | 1,688 | 775 | |
Total sales | 1,510 | 1,358 | 5,355 | 4,058 | 20,387 | |
Cost of goods sold | 1,006 | 913 | 4,026 | 2,697 | 15,215 | |
Gross profit | 446 | 445 | 1,329 | 1,361 | 5,172 | |
Operating expenses: | ||||||
Selling expenses | 188 | 389 | 226 | 900 | 829 | |
General and administrative expenses | 1,152 | 899 | 806 | 3,184 | 2,185 | |
Total operating expenses | 1,341 | 1,288 | 1,032 | 4,084 | 3,014 | |
Income from operations | (837) | (843) | 297 | (2,723) | 2,158 | |
Other expenses: | ||||||
Interest expense (net) | 87 | 72 | 107 | 239 | 211 | |
Bank expense | 1 | 1 | 10 | 15 | 42 | |
Foreign currency exchange loss(gain) | 1 | (57) | - | 4 | (53) | |
Other expense (profit) | (103) | 14 | (10) | (893) | (12) | |
Total other expenses | (14) | 30 | 107 | (635) | 188 | |
Income before income taxes | (823) | (873) | 190 | (2,088) | 1,970 | |
Income taxes (Benefits) expenses | 0 | 0 | (60) | 0 | 406 | |
Net income attributed to ordinary shareholders | (823) | (873) | 250 | (2,088) | 1,564 | |
Earnings per share | ||||||
Basic | (0.10) | (0.11) | 0.03 | (0.26) | 0.20 | |
Diluted | (0.10) | (0.11) | 0.03 | (0.26) | 0.20 | |
Weighted average number of shares used in computing earnings per share | ||||||
Basic | 7,971,465 | 7,971,465 | 7,949,965 | 7,949,965 | 7,949,965 | |
Diluted | 7,971,465 | 7,971,465 | 7,949,965 | 7,949,965 | 7,949,965 | |
WOWJOINT HOLDINGS LTD | ||||
Unaudited Consolidated Balance Sheet | ||||
(US dollars in thousands) | ||||
September 30, | June 30, | December 31, | ||
2012 | 2012 | 2011 | ||
ASSETS | ||||
Current Assets: | ||||
Cash and cash equivalents | 723 | 2,271 | 4,627 | |
Accounts receivable(net) | 9,019 | 9,164 | 12,308 | |
Other receivables | 1,445 | 1,713 | 1,656 | |
Advances to suppliers | 8,026 | 8,921 | 8,956 | |
Inventories | 3,803 | 4,010 | 3,979 | |
Costs and estimated earnings in excess of billings | 5,087 | 5,100 | 4,413 | |
Amount due from related parties | 21 | 22 | 76 | |
Restricted cash | 984 | 644 | 578 | |
Total Current Assets | 29,108 | 31,845 | 36,593 | |
Long-term investment | - | - | - | |
Property, plant and equipment | 15,994 | 15,160 | 14,589 | |
Intangible asset, net | 1,038 | 1,049 | 1,067 | |
Prepaid expense - Long-term | - | - | - | |
Total Assets | 46,141 | 48,054 | 52,249 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Liabilities: | ||||
Short-term loans | 1,577 | 3,478 | 3,492 | |
Accounts payable and accrued expenses | 12,890 | 12,037 | 14,203 | |
Advances from customers | 5,012 | 4,953 | 5,314 | |
Due to related parties | - | - | 54 | |
Unearned lease income | - | - | - | |
Taxes payable | 3,929 | 4,110 | 4,591 | |
Other payables | 806 | 744 | 481 | |
Billings in excess of costs and estimated earnings | - | - | - | |
Long-term loan due within one year | - | 474 | - | |
Total Current Liabilities | 24,214 | 25,796 | 28,135 | |
Long-term loan | 1,104 | 633 | 1,587 | |
Stockholders' Equity: | ||||
Common stock | 8 | 8 | 8 | |
Additional paid in capital | 10,336 | 10,336 | 10,336 | |
Statutory surplus reserves | 3,025 | 3,025 | 3,025 | |
Retained earnings | 5,061 | 5,884 | 7,149 | |
Accumulated other comprehensive income | 2,394 | 2,371 | 2,010 | |
Total Stockholders' Equity | 20,823 | 21,624 | 22,527 | |
Total Liabilities and Stockholders' Equity | 46,141 | 48,054 | 52,249 | |
WOWJOINT HOLDINGS LTD | ||
Statement of Cash Flows | ||
(US dollars in thousands) | ||
Nine Months Ended | ||
September 30, | September 30, | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | (2,088) | 1,564 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 498 | 308 |
Bad debt expense | 79 | (462) |
Other | ||
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,210 | 3,257 |
Other receivables | 211 | (3,140) |
Advances to suppliers | 930 | (325) |
Inventories | 176 | (2,575) |
Costs and estimated earnings in excess of billings | (673) | (1,095) |
Prepaid expense - Short-term | - | - |
Accounts payables and accrued expenses | (1,313) | 3,104 |
Other payables | 325 | 244 |
Unearned lease income | - | (748) |
Advances from customers | (302) | 6,586 |
Taxes payable | (663) | 237 |
Billings in excess of costs and estimated earnings | - | (366) |
Total adjustments | 2,477 | 5,023 |
Net cash (used in) provided by operating activities | 389 | 6,587 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Long term investment | - | (4,723) |
Purchase of property, plant and equipment | (1,902) | (4,915) |
Prepaid expense - Long-term | - | (19) |
Net cash used in investing activities | (1,902) | (9,656) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net cash provided by acquisition | - | - |
Repayment of short-term loans | (1,915) | - |
Proceeds from short-term loans | - | 1,795 |
Repayment of long-term loans | (483) | - |
Proceeds from long-term loans | - | 1,574 |
Restricted cash | (406) | 368 |
Due from related parties | 55 | 82 |
Due to related parties | (54) | - |
Net cash provided by (used in) financing activities | (2,803) | 3,818 |
NET INCREASE (DECREASE) IN CASH | (4,316) | 749 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 413 | 845 |
CASH, BEGINNING OF PERIOD | 4,627 | 2,168 |
CASH, END OF PERIOD | 723 | 3,762 |
SUPPLEMENTAL DISCLOSURES: | ||
Cash paid during the period for: | ||
Interest paid | 188 | 145 |
Income tax paid | 316 | 316 |
