PINGDINGSHAN, China, May 16, 2016 /PRNewswire/ -- Yulong Eco-Materials Limited (NasdaqCM: YECO), an eco-friendly building products and construction waste management company, today announced its financial results for fiscal 2016 Q3 and 9M periods ended March 31, 2016.
Financial Snapshot ($ million)
Q3 fiscal 2016 |
Q3 fiscal 2015 |
% change |
9M |
9M fiscal 2015 |
% change |
|
Revenue |
11.2 |
10.4 |
7.2% |
37.1 |
33.6 |
10.4% |
Gross Profit |
4.3 |
4.0 |
8.9% |
14.5 |
12.2 |
18.8% |
Gross Margin |
38.5% |
37.9% |
60 bps |
39.2% |
36.4% |
270 bps |
Income from Operations |
3.6 |
3.0 |
17.1% |
11.4 |
9.4 |
21.9% |
Net Income |
2.5 |
2.0 |
24.3% |
8.2 |
6.2 |
32.5% |
EPS* |
0.21 |
0.26 |
(19.2)% |
0.69 |
0.78 |
(11.5)% |
*Basic and diluted earnings per share for the Q3 and 9M periods of fiscal 2016 were calculated on approximately 49% more shares outstanding than in the prior year period, due to new shares issued in Yulong's IPO completed on July 1, 2015. |
For fiscal 2016 9M, as compared to the same period of fiscal 2015, the Company reported 10.4% increase in revenue to a record of $37.1 million and 32.5% increase in net income to $8.2 million, mainly due to approximately $5.5 million incremental high margin revenue generated by construction waste management (CWM) segment.
Total gross margin for fiscal 2016 9M improved to 39.2% vs. 36.4% for the same period of fiscal 2015, mainly due to the 58.3% gross margin generated by the construction waste management, or CWM, business, offset by lower gross margin for the brick business which was a result of lower average selling price per unit. Although total SG&A expenses increased by 9% to $3.1 million mainly due expenses associated with costs related to our public company status (which were not incurred in the same period of fiscal 2015), as a percent of total revenue they decreased to 8.5% vs. 8.6% for the same period of fiscal 2015. As a result, we reported substantial improvement to our bottom line as income from operations for fiscal 2016 9M period improved by 21.9%, and net income increased by 32.5%, as compared to the same period of fiscal 2015.
Cash and cash equivalents at March 31, 2016 increased to approximately $31.8 million, as compared to $16.5 million at June 30, 2015; total liabilities decreased to $23.0 million as compared to $30.9 million at June 30, 2015.
Announces Guidance for Fiscal 2016
Fiscal 2016 Q4 is expected to be another strong quarter in terms of revenue and net income, thus for fiscal 2016, the Company expects:
CWM Business
Henan province, located in central part of China, is a major transportation, logistics, industrial, and resource distribution hub of the country. China's central government has budgeted several billion dollars to further expand and upgrade the province's infrastructure and develop new financial and industrial zones. To make way for these new developments, hundreds of thousands of older residential and commercial buildings need to be demolished, generating hundreds of millions metric tons of construction waste that need to be recycled, processed and reutilized. Thus, we believe the need for CWM services throughout Henan, will continue to grow for the next 10 years, which we believe Yulong is well positioned to take advantage of going forward. Current and future opportunities to grow our CMW business include:
About Yulong Eco-Materials
Yulong is a vertically integrated manufacturer of eco-friendly building products and a construction waste management company located in the city of Pingdingshan in Henan Province, China. The Company is currently Pingdingshan's leading producer of fly-ash bricks and concrete as well as exclusive provider of CWM services in Pingdingshan and Shangqiu.
Forward-Looking Statements
This press release contains forward-looking statements, particularly as related to, among other things, the business plans of the Company, statements relating to goals, plans and projections regarding the Company's financial position and business strategy. The words or phrases "plans," "would be," "will allow," "intends to," "may result," "are expected to," "will continue," "anticipates," "expects," "estimate," "project," "indicate," "could," "potentially," "should," "believe," "think," "considers" or similar expressions are intended to identify "forward-looking statements." These forward-looking statements fall within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and are subject to the safe harbor created by these sections. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Such forward-looking statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, transactions or orders that may be cancelled, and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties related to the fluctuation of local, regional, and global economic conditions, the performance of management and our employees, our ability to obtain financing, competition, general economic conditions and other factors that are detailed in our periodic reports and on documents we file from time to time with the Securities and Exchange Commission. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.
Contact:
Investor Relations Counsel:
The Equity Group Inc.
Lena Cati, 212-836-9611
Vice President
lcati@equityny.com
www.theequitygroup.com
YULONG ECO-MATERIALS LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) |
||||||||||||||||
For the Three Months Ended March 31, |
For the Nine Months Ended March 31, |
|||||||||||||||
2016 |
2015 |
2016 |
2015 |
|||||||||||||
REVENUES |
||||||||||||||||
Bricks |
$ |
3,429,182 |
$ |
3,685,593 |
$ |
10,895,564 |
$ |
11,760,921 |
||||||||
Concrete |
6,219,209 |
6,763,023 |
20,798,897 |
21,888,479 |
||||||||||||
Recycling |
1,556,473 |
- |
5,452,931 |
- |
||||||||||||
TOTAL REVENUES |
11,204,864 |
10,448,616 |
37,147,392 |
33,649,400 |
||||||||||||
COST OF REVENUES |
||||||||||||||||
Bricks |
1,548,895 |
1,466,709 |
4,868,376 |
4,654,917 |
||||||||||||
Concrete |
4,632,665 |
5,022,570 |
15,458,608 |
16,753,593 |
||||||||||||
Recycling |
712,495 |
- |
2,274,255 |
- |
||||||||||||
TOTAL COST OF REVENUES |
6,894,055 |
6,489,279 |
22,601,239 |
21,408,510 |
||||||||||||
GROSS PROFIT |
4,310,809 |
3,959,337 |
14,546,153 |
12,240,890 |
||||||||||||
OPERATING EXPENSES: |
||||||||||||||||
Selling |
85,335 |
144,026 |
336,245 |
509,789 |
||||||||||||
General and administrative |
670,288 |
779,574 |
2,812,501 |
2,379,241 |
||||||||||||
Total operating expenses |
755,623 |
923,600 |
3,148,746 |
2,889,030 |
||||||||||||
INCOME FROM OPERATIONS |
3,555,186 |
3,035,737 |
11,397,407 |
9,351,860 |
||||||||||||
OTHER INCOME (EXPENSE), net |
||||||||||||||||
Interest income |
28,372 |
17,423 |
74,409 |
45,844 |
||||||||||||
Interest expense |
(251,372) |
(305,034) |
(737,042) |
(955,048) |
||||||||||||
Change in fair value of warrant liabilities |
36,663 |
- |
179,437 |
- |
||||||||||||
Other (expense) income, net |
(12,558) |
(52,098) |
173,532 |
(138,708) |
||||||||||||
Total other expense, net |
(198,895) |
(339,709) |
(309,664) |
(1,047,912) |
||||||||||||
INCOME BEFORE INCOME TAXES |
3,356,291 |
2,696,028 |
11,087,743 |
8,303,948 |
||||||||||||
PROVISION FOR INCOME TAXES |
810,791 |
648,591 |
2,865,311 |
2,097,387 |
||||||||||||
NET INCOME |
2,545,500 |
2,047,437 |
8,222,432 |
6,206,561 |
||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) |
||||||||||||||||
Foreign currency translation adjustments |
500,223 |
188,779 |
(3,535,743) |
237,924 |
||||||||||||
COMPREHENSIVE INCOME |
$ |
3,045,723 |
$ |
2,236,216 |
$ |
4,686,689 |
$ |
6,444,485 |
||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES |
||||||||||||||||
Basic and diluted |
11,970,616 |
8,000,000 |
11,903,375 |
8,000,000 |
||||||||||||
EARNINGS PER SHARE |
||||||||||||||||
Basic and diluted |
$ |
0.21 |
$ |
0.26 |
$ |
0.69 |
$ |
0.78 |
YULONG ECO-MATERIALS LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||||||
March 31, |
June 30, |
|||||||
2016 |
2015 |
|||||||
ASSETS |
||||||||
CURRENT ASSETS |
||||||||
Cash and cash equivalents |
$ |
31,759,252 |
$ |
16,470,299 |
||||
Accounts receivable |
14,120,224 |
9,329,495 |
||||||
Deposits and other receivables |
1,092,865 |
286,153 |
||||||
Inventories |
573,939 |
364,254 |
||||||
Advances to suppliers |
118,291 |
17,421 |
||||||
Prepaid expenses and other |
210,451 |
373,617 |
||||||
Total current assets |
47,875,022 |
26,841,239 |
||||||
PLANT AND EQUIPMENT, net |
39,289,978 |
41,267,655 |
||||||
OTHER ASSETS |
||||||||
Prepayments |
2,853,914 |
3,658,748 |
||||||
Intangible assets, net |
4,568,757 |
4,913,376 |
||||||
Deferred tax asset, net |
665,575 |
520,147 |
||||||
Long-term deposit |
611,043 |
397,300 |
||||||
Prepaid expenses-net of current portion |
50,000 |
- |
||||||
Total other assets |
8,749,289 |
9,489,571 |
||||||
Total assets |
$ |
95,914,289 |
$ |
77,598,465 |
||||
LIABILITIES AND EQUITY |
||||||||
CURRENT LIABILITIES |
||||||||
Short term loan - bank |
$ |
7,398,270 |
$ |
7,972,190 |
||||
Accounts payable, trade |
2,550,941 |
1,726,158 |
||||||
Other payables and accrued liabilities |
5,605,400 |
4,817,399 |
||||||
Other payables - related parties |
20,163 |
2,584,104 |
||||||
Customer deposits |
537,698 |
- |
||||||
Taxes payable |
2,324,746 |
1,098,093 |
||||||
Capital lease obligation |
4,217,120 |
4,615,083 |
||||||
Dividends payable |
- |
7,994,125 |
||||||
Warrant liabilities |
295,943 |
- |
||||||
Total current liabilities |
22,950,281 |
30,807,152 |
||||||
LONG TERM LIABILITIES |
||||||||
Capital lease obligation-net of current portion |
58,763 |
138,952 |
||||||
Total liabilities |
23,009,044 |
30,946,104 |
||||||
COMMITMENTS AND CONTINGENCIES |
||||||||
EQUITY |
||||||||
Common stock, $0.00125 par value, 100,000,000 shares authorized, 11,997,184 and 8,000,000 shares issued and outstanding at March 31, 2016 and June 30, 2015, respectively |
14,997 |
10,000 |
||||||
Subscription receivable |
(10,000) |
(10,000) |
||||||
Additional paid-in capital |
40,572,662 |
19,011,464 |
||||||
Statutory reserves |
3,922,228 |
3,922,228 |
||||||
Retained earnings |
29,434,261 |
21,211,829 |
||||||
Accumulated other comprehensive (loss) income |
(1,028,903) |
2,506,840 |
||||||
Total equity |
72,905,245 |
46,652,361 |
||||||
Total liabilities and equity |
$ |
95,914,289 |
$ |
77,598,465 |
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