Tri-Tech Holding Full Year 2009 Revenue Up 99% to $16.8M; Net Income Up 127% to $3.8M; EPS $0.92 vs. $0.48
Company Anticipating Continued Growth in 2010 Business
BEIJING, March 25 /PRNewswire-Asia-FirstCall/ -- Tri-Tech Holding Inc. (Nasdaq: TRIT), a leading Chinese project development and management company that engineers, manages and monitors China's municipal sewer systems, natural waterways and resources, announced today that revenue for the fiscal year ended December 31, 2009 increased 99% to $16.8 million from $8.4 million in 2008. Diluted earnings per share for the year were $0.92 based on net income of $3.8 million. This compares with net income of $1.7 million or $0.48 diluted EPS in 2008.
Fourth Quarter 2009 Highlights
-- Revenue for Q4 2009 increased 103% to $5.9 million from $2.9 million in
Q4 2008.
-- Gross profit (exclusive of depreciation and amortization) increased
190% to $2.3 million for Q4 2009 from $0.8 million in Q4 2008.
-- Q4 2009 gross margin 38% vs. 27% for Q4 2008.
-- Income from operations increased 117% to $1.1 million from $0.5 million
in Q3 2008.
-- Net income increased 212% to $1.3 million from $0.4 million in Q4 2008.
-- Diluted earnings per share increased to $0.24, from $0.12 in Q4 2008.
-- Weighted average number of diluted shares outstanding was 5.54 million
as of December 31, 2009, compared to 3.56 million as of December 31,
2008.
FY 2009 Highlights
-- Revenue for 2009 increased 99% to $16.8 million from $8.4 million in
2008.
-- Wastewater and Tail Gas Treatment segment revenue increased 80% to
$9.0 million.
-- Water Resource Management segment revenue was up 125% to $7.8 million.
-- Gross profit (exclusive of depreciation and amortization) increased
112% to $6.6 million for 2009 from $3.1 million in 2008.
-- 2009 gross margin 39% vs. 37% for 2008.
-- Income from operations increased 126% to $4.1 million from $1.8 million
in 2008.
-- Net income increased 127% to $3.8 million from $1.7 million in 2008.
-- Diluted earnings per share increased to $0.92 from $0.48 in 2008.
-- Weighted average number of diluted shares outstanding was 4.17 million
as of December 31, 2009, compared to 3.56 million as of December 31,
2008.
-- Completed successful initial public offering of 1.7 million ordinary
shares at a price of $6.75 per share, traded on NASDAQ Capital Market
on September 10, 2009.
FY 2009 Financial Performance
Total revenue was $16.8 million in 2009, an increase of $8.3 million, or 99%, compared to revenue of $8.4 million in 2008. The increase was driven by larger contracts, several of which exceeded $1.5 million. The revenue was primarily generated by system integration work and hardware and software sales from two operating segments. For wastewater and tail gas treatment, revenue was $9 million, an increase of $4 million or 80%, compared to $5 million in year 2008. Revenue from water resources management saw a 125% significant increase to $7.8 million from $3.5 million in 2008.
Net income
Net income attributable to shareholders was $3.8 million, an increase of $2.2 million or 127%, compared to $1.7 million in year 2008.
Diluted earnings per share for the year were $0.92 based on net income of $3.8 million. This compares with net income of $1.7 million or $0.48 diluted EPS in 2008.
Gross profit (exclusive of depreciation and amortization)
Gross profit (exclusive of depreciation and amortization) increased 112% to $6.6 million for 2009 from $3.1 million in 2008. Of total revenue, cost (exclusive of depreciation and amortization) decreased to 61%, compared with 63% in 2008, because the company sourced more locally made equipment at lower cost for the projects. Gross margin (exclusive of depreciation and amortization) for 2009 was 39%, compared to 37% for 2008.
During 2009, significant Chinese government spending along with tight construction timelines, and strong market demand resulted in high market value for construction projects. Under such business climate, Tri-Tech enjoyed rapid growth in revenue while limited cost of that revenue.
Operating income
Operating income increased 126% to $4.1 million from $1.8 million in 2008. Operating margin was 24%, compared to 21% in the year ended December 31 2008.
Liquidity and Capital Resources
As of December 31, 2009, cash and cash equivalents were $7.2 million, including a deposit of $3.3 million. As of December 31, 2009, working capital was $17 million, including cash and cash equivalents of $7.2 million.
Order Backlog
As of December 31, 2009, the company had a total backlog of $11.5 million to be collected in 2010, including $9.3 million in municipal water and wastewater services, $1.5 million in water resources services and $0.7 million in industrial sector services. The backlog represents the amount of our existing contract work remaining to be completed in 2010 for which we have not been paid in full, based on the assumptions that our customers will approve these projects upon completion.
Management Comment
Chief Executive Officer Warren Zhao said, "We are pleased with the financial results in our first year as a publicly-traded company. The strong growth in our two business segments has highlighted the strength of our business model, which we believe will continue to get stronger as we work to help alleviate China's critical water resource crisis.
"We are currently pursuing smaller river basin flood monitoring and forecasting systems and groundwater monitoring systems across the country. In 2009, we received awards for five projects for smaller river basin flood and forecasting systems.
"Through local distributors and partnerships, we are promoting our proprietary products targeting the water monitoring and dispatching systems of the Northward Rerouting of Southern River engineering construction. We believe that the entire Northward Rerouting of Southern River engineering project has a market potential of approximately $43.5 million.
"In 2009, the Chinese government launched the 103 Pilot-County Mountain Torrent Forecast Plan. Accordingly, the government allocated approximately $29 million to fund these projects to deal with frequent mountain torrents devastation. During the year, we won the bids for 14 of these pilot projects, which was in line with our internal expectations on the bid win rate.
"At present, our wastewater treatment business is focused on Tianjin City and Hebei Province. In 2009, we won 26 contracts from this targeted wastewater treatment market, including pump stations, treatment plants, odor control systems, automatic controls and instruments.
"We are actively pursuing opportunities in the industrial wastewater and process tail gas treatment markets in the oil and gas industry and the petrochemical industry such as SINOPEC and PetroChina. Additionally, we intend to strengthen our industrial pollution control services by penetrating adjacent industry verticals such as the power generation industry.
"Currently almost all newly-designed sewage treatment plants have odorous gas containment and control requirements. Therefore, we expect an increase in the sales of our proprietary bio-filtration odor control systems.
"In order to pursue several major new projects and increase our interaction with our clients, we recently set up branch offices in Tianjin Dongli Economic Development Zone, Tianjin Baodi Economic Development Zone and Hebei Province.
"In our municipal wastewater business, we plan to expand our target market. In our current business footprint in only Hebei and Tianjin, the government is building 80 new wastewater treatment plants. We believe significant opportunities exist in 32 other provinces, municipalities and autonomous regions in China.
"We intend to expand our role from sub-contractor to prime-contractor. Since inception, we have grown from a provider of system controls to a company capable of managing the whole installation of municipal water and wastewater facilities. As we continue to grow, we will focus our business on more complex installation projects.
"We also intend to further develop our water resource management services from partial management solutions to full management of large-scale river basin projects. We believe the Chinese government's allocation of significant investment offers us huge business opportunities.
"In addition to organic growth, we are targeting selected acquisitions. In general, our markets are highly fragmented with small competitors. We will consider acquiring companies that we believe will add significant value to our business. These targets may have strong customer relationships but limited market reach, or may possess specialized skills but the businesses have not scaled up. When evaluating targets, we use a disciplined, conservative approach to ensure the acquisitions are strategic and accretive," Zhao said.
About Tri-Tech Holding Inc.
Tri-Tech designs customized sewage treatment and odor control systems for China's municipalities and its larger cities. These systems combine software, information management systems, resource planning and local and distant networking hardware that includes sensors, control systems, programmable logic controllers, supervisory control and data acquisition systems. The company also designs systems that track natural waterway levels for drought control, monitor groundwater quality and assist the government in managing its water resources. Tri-Tech owns seven software copyrights and two technological patents and employs 120 people. Please visit http://www.Tri-Tech.cn for more information.
An online investor kit including a company profile, press releases, current price quotes, stock charts and other valuable information for investors is available at http://www.hawkassociates.com/profile/trit.cfm . To subscribe to future releases via e-mail alert, visit http://www.hawkassociates.com/about/alert/ .
Tri-Tech Holding Inc. has based these forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward- looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
For further information, please contact:
Hawk Associates
Susan Zhou
Tel: +1-305-451-1888
Email: [email protected]
TRI-TECH HOLDING INC.
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
AUDITED
For the Year Ended Quarter Ended
December 31, December 31,
2009 2008 2009 2008
(Restated)
Revenues:
System integration $12,023,686 $6,119,266 $4,499,924 $1,410,327
Products 2,511,962 1,115,811 633,914 1,051,322
Software revenue 2,264,246 1,214,881 760,887 436,943
Total revenues 16,799,895 8,449,958 5,894,726 2,898,592
Cost of revenues: (exclusive
of depreciation and
amortization shown
separately below)
System integration 8,003,667 4,219,892 3,095,900 1,058,291
Products 2,115,052 1,036,401 528,438 1,000,909
Cost of software 57,207 65,947 15,143 62,012
Total cost of
revenues(exclusive of
depreciation and
amortization shown
separately below) 10,175,925 5,322,240 3,639,482 2,121,212
Operating expenses:
Depreciation and amortization
expenses 119,173 88,731 43,724 29,009
Other operating expenses 2,448,721 1,242,415 1,078,606 227,350
Total operating expenses 2,567,894 1,331,146 1,122,330 256,359
Operating income (loss): 4,056,076 1,796,572 1,132,914 521,021
Other income (expenses):
Interest income 26,855 17,475 1,729 931
Interest expense (5,683) (7,833) (1,510) (5,444)
Government allowance 107,380 102,644 58,338 37,401
Other expense (7,592) (1,774) (2,899) (483)
Total other income
(expenses), net 120,961 110,512 55,660 32,404
Income before provision for
income taxes and
noncontrolling interests
income 4,177,037 1,907,084 1,188,574 553,425
Provision for income taxes (308,085) (202,247) (758,550) (141,771)
Net income 3,868,952 1,704,837 1,330,955 411,654
Noncontrolling Interests
Income 18,182 8,685 5,730 (13,525)
Net income attributable to
Tri-Tech Holding Inc 3,850,770 1,696,152 1,325,225 425,179
Other comprehensive income
Foreign currency translation
adjustment 15,899 259,708 (51,216) (46,834)
Comprehensive income 3,884,851 1,964,545 1,279,739 378,345
Comprehensive income
attributable to
noncontrolling interests 18,312 17,211 5,155 17,211
Comprehensive income
attributable to Tri-Tech
Holding Inc. 3,866,538 1,947,334 1,274,584 361,134
Net income attributable to
Tri-Tech Holding Inc. per
share:
Basic $0.94 $0.48 $0.25 $0.12
Diluted $0.92 $0.48 $0.24 $0.12
Shares used in computation:
Basic 4,081,301 3,555,000 5,255,000 3,555,000
Diluted 4,170,879 3,555,000 5,544,343 3,555,000
TRI-TECH HOLDING INC.
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2009 2008
(Restated)
ASSETS
Current Assets
Cash $7,171,464 $732,418
Restricted cash 1,501,128 --
Accounts receivable, net of allowance
for doubtful accounts of $56,491 and
$62,286 as of December 31, 2009 and
December 31, 2008, respectively 4,338,239 3,105,859
Unbilled revenue 3,952,763 1,429,846
Notes receivable -- 7,316
Other receivables 273,602 166,395
Inventories 1,573,324 1,466,468
Deposits on projects 585,153 266,973
Prepayments to suppliers and
subcontractors 1,898,900 567,346
Total current assets 21,294,573 7,742,621
Long-term unbilled revenue 1,723,852 --
Plant and equipment, net 374,009 174,128
Proprietary technology, net 797,854 857,475
Total assets $24,190,288 $8,774,224
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and cost accrual on
projects $3,367,056 $1,589,103
Commercial paper and other short-term
notes payable
Non-related parties -- 271,041
Related party -- 14,631
Customer deposits 494,047 436,372
Billings in excess of revenue 8,650 30,639
Other payables 8,633 81,721
Accrued liabilities 103,190 84,660
Deferred income taxes 141,478 83,643
Income taxes payable 144,232 141,818
Other taxes payable -- 90,908
Total current liabilities 4,267,286 2,824,536
Long-term liabilities 58,171 --
Total liabilities 4,325,457 2,824,536
Shareholders' equity
Tri-Tech Holding Inc. shareholders'
equity
Common stock (30,000,000 shares
authorized and $0.001 par value,
5,255,000 and 3,555,000 issued as of
December 31, 2009 and 2008,
respectively; on December 31, 2009,
340,000 shares issued were held in
escrow. See note 12 for more
discussion.) 5,255 3,555
Additional paid-in-capital 12,942,650 2,914,058
Statutory reserves 50,655 50,655
Retained earnings 6,333,343 2,482,573
Accumulated other comprehensive
income 377,097 361,328
Total Tri-Tech Holding Inc.
shareholders' equity 19,709,000 5,812,169
Noncontrolling Interests 155,831 137,519
Total shareholders' equity 19,864,831 5,949,688
Total liabilities and shareholders'
equity $24,190,288 $8,774,224
TRI-TECH HOLDING INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Year Ended December 31,
2009 2008(Restated)
Cash flows from operating activities:
Net income $3,868,952 $1,704,838
Adjustments to reconcile net income
to cash:
Depreciation 59,244 30,892
Amortization 60,588 57,839
Allowance for doubtful accounts 1,322 22,935
Deferred income taxes 66,061 74,429
Changes in operating assets and
liabilities:
Restricted cash (1,500,534) --
Accounts receivable (1,230,305) (1,528,876)
Unbilled revenue (4,243,749) (360,048)
Other receivables (424,813) (104,235)
Inventories (161,817) (330,918)
Prepayments and deferred expenses (1,315,244) (163,280)
Accounts payable 1,761,867 145,002
Customer deposits 57,244 (5,286)
Billings in excess of revenue (22,009) --
Other payables 218,941 112,280
Accrued liabilities 18,443 --
Taxes payable (140,036) (48,606)
Net cash provided by operating
activities (2,925,845) (393,034)
Cash flows from investing activities:
Additions to equipment (197,087) (91,351)
Cash flows from financing activities:
Common stock 10,105,170 --
(Repayments to)advances from third
parties (278,507) 678,485
Repayment from a related party of an
advance -- (4,750)
Net cash provided by (used in)
financing activities 9,826,663 673,735
Effect of exchange rate changes on
cash and cash equivalents (264,685) 175,355
Net increase in cash 6,439,046 364,705
Cash, beginning of year 732,418 367,713
Cash, end of period $7,171,464 $732,418
Supplemental Data:
Income taxes paid $239,743 $--
Interest paid on debt $4,538 $7,832
Borrow money from third party, using
in purchase transportation equipment
on April 2009. $87,221 $--
SOURCE Tri-Tech Holding Inc.
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