Newater Technology, Inc. Announces Year 2019 Audited Financial Results

News provided by

Newater Technology, Inc.

Jun 05, 2020, 21:20 ET

NEW YORK, June 5, 2020 /PRNewswire/ -- Newater Technology, Inc. (NASDAQ: NEWA) (''NEWA,'' ''we,'' ''our'' or the ''Company''), a leading company specializing in development, production and application of DTRO equipment and systems used in waste water filtration, today announced its financial results for the year ended December 31, 2019.

The year ended December 31, 2019 Financial Highlights (all comparisons to the year ended December 31, 2018):

Revenues decreased by 20% from $47 million to $37.6 million in 2019, the decrease in revenues for the year ended December 31, 2019 was mainly due to in 2017-2018, the revenue of Laixi operation project accounted for a large proportion of the whole year's revenue. In 2019, there was no such operation project that generated as much revenue.

Cost of revenues decreased by 17% from $26 million to $21.7 million in 2019, the decrease in cost of revenues directly corresponded to the decrease in revenue during the same year.

Gross profit decreased by 24% from $20.9 million to $15.9 million in 2019, while the gross profit margin was 42% in 2019.

Net income (before currency translation loss) decreased by 40% from $7.2 million to $4.3 million in 2019, and the net profit margin in 2019 was 11.48%.

Total assets increased by 26% from $62 million to $78 million in 2019 mainly driven by the new production facility and production line completed during the year.

Basic earnings per share was $0.40 in 2019, compared to $0.67 in 2018 and $0.26 in 2017.

Mr. Yuebiao Li, the Company's CEO, commented "We are pleased with our accomplishments in 2019, we moved our business office to a new industrial park, management has focused its attention to strategic adjustments of operations and administration, invested more effort in an innovative team for the construction of new products, established a new R & D laboratory, completed our new automatic DTRO membrane production line to achieve high production standard, instituted a chief engineer responsible for product quality in each of the industries we serve, and developed a new patented process package."

In 2020, we will continue to make more efforts to skillfully apply our products to more wastewater treatment fields and undertake larger projects, in order to achieve company's eternal goal of "renewable resources (New Water) recycling".

About Newater Technology, Inc.

Founded in 2012 and headquartered in Yantai, China, Newater, operating its business through its wholly owned subsidiary Yantai Jinzheng Eco-Technology Co. Ltd., specializes in the development, manufacture and sale of DTRO (Disk Tube Reverse Osmosis) and DTNF (Disk Tube Nano-Filtration) membranes for waste water treatment, recycling and discharge. Newater provides integrated technical solutions in engineering support and installation, technical advice and services, and, and other project-related solutions to turn wastewater into valuable clean water. Newater also provides wastewater treatment services, such as landfill leachate treatment and purification services.

More information about the Company can be found at www.dtNEWA.com.

The Company's products can be used across a wide spectrum of industries, including:

  • Landfill leachate; 
  • Wastewater from coal mines;
  • Industrial park common effluent; and
  • Briny wastewater.

More information about the Company can be found at: www.dtNEWA.com

Notice

Rounding amounts and percentages: Certain amounts and percentages included in this press release have been rounded for ease of presentation. Percentage figures included in this press release have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, certain percentage amounts in this press release may vary from those obtained by performing the same calculations using the figures in the financial statements. In addition, certain other amounts that appear in this press release may not sum due to rounding.

Forward-Looking Statements

This press release contains 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. When the Company uses words such as "may", "will", "intend", "should", "believe", "expect", "anticipate", "project", "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Specifically, the Company's statements regarding its ability to apply its products to more industries and obtain larger products are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's goals and strategies; the Company's future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the water filtration industry in China; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

 

NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

December 31, 
2019

December 31, 
2018




ASSETS




Current assets




Cash and cash equivalents

$

9,944,765

$

2,461,501

Restricted cash, current

4,021,177

6,033,482

Accounts receivable, net

11,293,625

10,064,847

Accounts receivable - related parties, net

2,392,087

1,948,009

Notes receivable

360,505

6,999

Inventories

13,715,369

13,762,959

Deposit - related party

-

10,180

Deferred cost of revenue

221,737

343,090

Advances to suppliers and other current assets, net

4,699,755

4,904,290

Total current assets

46,649,020

39,535,357






Retentions receivable, non-current

734,140

344,856

Property, plant and equipment, net

24,611,862

18,753,340

Land use right, net

2,008,096

2,078,240

Operating lease right-of-use assets, net

141,016

-

Deferred tax assets

-

604,064

Deposit on loan agreement

918,643

436,275

Long-term investments

2,997,419

-

Total assets

$

78,060,196

$

61,752,132






LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities




Accounts payable and bank acceptance notes to vendors

$

8,099,529

$

5,353,538

Accounts payable - related parties

5,225,004

3,389,148

Loans due within one year

11,809,449

10,867,111

Advances from customers

5,522,913

2,953,595

Advances from customers - related parties

7,254,968

586,719

Income tax payables

322,419

732,699

Accrued expenses and other payables

6,971,505

6,375,800

Operating lease liabilities, current

56,852

-

Deferred income

43,061

-

Total current liabilities

45,305,700

30,258,610






Deferred Income, non-current

43,061

-

Deferred tax liabilities

288,687

-

Operating lease liabilities, non-current

68,420

-

Long term loans, less current portion and unamortized debt issuance costs

1,377,217

4,449,889

Total non-current liabilities

1,777,385

4,449,889

Total liabilities

47,083,085

34,708,499






Shareholders' equity




Common shares ($0.001 par value, 200,000,000 shares authorized,10,809,000 shares issued and outstanding as of December 31, 2019 and December 31, 2018)

10,809

10,809

Additional paid-in capital

26,303,348

15,059,181

Statutory reserves

2,267,219

1,765,711

Retained earnings

3,946,021

11,380,149

Accumulated other comprehensive loss

(1,550,286)

(1,172,217)

Total shareholders' equity

30,977,111

27,043,633

Total liabilities and shareholders' equity

$

78,060,196

$

61,752,132

 

NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

 

For the Years ended December 31,

2019

2018

2017






Net revenues

$

23,716,978

$

25,973,963

$

16,192,503

Net revenues from related parties

13,857,014

21,066,741

9,146,994

        Total revenues

37,573,992

47,040,704

25,339,497

Cost of revenues

20,233,998

20,474,072

17,199,866

Cost of revenues from related parties

1,450,627

5,669,252

-

        Total cost of revenues

21,684,625

26,143,324

17,199,866

        Gross profit

15,889,367

20,897,380

8,139,631

Operating expenses:







Selling, general and administrative

10,148,039

12,025,924

5,452,349

        Total operating expenses

10,148,039

12,025,924

5,452,349

Income from operations

5,741,328

8,871,456

2,687,282

Interest expense

1,087,051

658,290

242,707

Interest income

(38,328)

(26,632)

(112,592)

Government grants

(946,164)

(627,748)

(513,538)

Investment loss

17,023

-

-

Other expenses (income)

(153,546)

(1,162)

3,956

        Total other expenses (income)

(33,964)

2,748

(379,467)

Income before income taxes provisions

5,775,292

8,868,708

3,066,749

Income tax provisions

1,463,745

1,657,279

475,818

Net income

$

4,311,547

$

7,211,429

$

2,590,931

Other comprehensive income (loss)







Foreign currency translation adjustment

(378,069)

(1,159,084)

535,810

Total comprehensive income

$

3,933,478

$

6,052,345

$

3,126,741









Earnings per common share







Basic

$

0.40

$

0.67

$

0.26

Diluted

$

0.40

$

0.67

$

0.26

Weighted average common shares outstanding







Basic

10,809,000

10,809,000

9,864,479

Diluted

10,809,000

10,809,000

9,864,479

NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

Number of Shares

Common Shares

Additional Paid-in Capital

Retained Earnings

Statutory Reserves

Accumulated Other Comprehensive Loss

Total Shareholder's Equity

Balance, January 1, 2017

9,199,000

$

9,199

$

7,949,466

$

2,960,698

$

382,802

$

(548,943)

$

10,753,222

Net income









2,590,931







2,590,931

Statutory reserves









(322,896)

322,896




-

Issuance of common shares for cash

1,610,000

1,610

7,109,715










7,111,325

Foreign currency translation adjustment















535,810

535,810

Balance, December 31, 2017

10,809,000

$

10,809

$

15,059,181

$

5,228,733

$

705,698

$

(13,133)

$

20,991,288

Net income









7,211,429







7,211,429

Statutory reserves









(1,060,013)

1,060,013




-

Foreign currency translation adjustment















(1,159,084)

(1,159,084)

Balance, December 31, 2018

10,809,000

$

10,809

$

15,059,181

$

11,380,149

$

1,765,711

$

(1,172,217)

$

27,043,633

Net loss









4,311,547







4,311,547

Statutory reserves









(501,508)

501,508




-

Capital increase from retained earnings






11,244,167

(11,244,167)








Foreign currency translation adjustment















(378,069)

(378,069)

Balance, December 31, 2019

10,809,000

$

10,809

$

26,303,348

$

3,946,021

$

2,267,219

$

(1,550,286)

$

30,977,111

NEWATER TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31,

2019

2018

2017

Cash flows from operating activities







Net income

$

4,311,547

$

7,211,429

$

2,590,931

Adjustments to reconcile net income to net cash used in operating activities:







Loss from equity method investment

17,023

-

-

Depreciation and amortization expense

1,549,296

558,327

233,493

Deferred income taxes

892,548

(118,199)

(312,997)

Bad debt expense

1,243,709

280,228

229,707

Amortization of debt issuance costs

324,221

103,772

-

Noncash lease expense

41,935

-

-

Loss on disposal of property, plant and equipment

1,367

13,256

-

Changes in assets and liabilities:







Accounts receivable, net

(1,509,728)

(5,327,278)

(5,076,425)

Accounts receivable - related parties, net

(1,103,104)

(1,427,078)

2,821,621

Notes receivable

(356,648)

(7,276)

70,000

Inventories

(2,923,465)

(5,762,750)

(4,923,400)

Deferred cost of revenue

117,910

383,382

(657,875)

Deferred cost of revenue - related party

-

1,765,856

(1,795,222)

Advances to suppliers and other current assets, net

(311,090)

(2,108,928)

(412,955)

Due from related parties

-

-

703

Retentions receivable, non-current

(397,157)

(358,505)

-

Deposit - related party

10,134

(10,583)

-

Other non-current assets

-

-

4,719

Accounts payable and bank acceptance notes to vendors

2,839,752

996,619

2,577,192

Accounts payable - related parties

1,896,054

3,269,238

248,695

Deferred income

43,433

-

(26,639)

Advances from customers

2,630,143

2,420,363

(220,483)

Advances from customers - related parties

6,733,465

(125,099)

719,550

Due to related parties

-

-

5,102

Deferred income, non-current

43,433

-

-

Operating lease liabilities

(76,752)

-

-

Income tax payables

(404,231)

267,988

144,944

Accrued expenses and other payables

(2,322,199)

(4,481,539)

589,638

Net cash provided by (used in) operating activities

13,291,596

(2,456,777)

(3,189,701)

Cash flows from investing activities







Cash paid for equity investments

(3,015,119)

-

-

Purchase of property, plant and equipment

(2,316,967)

(5,511,732)

(1,482,360)

Proceeds from disposal of property, plant and equipment

427,261

22,072

-

Advances to third party

-

-

(1,236,490)

Repayments from third party

-

-

1,236,490

Repayments from related parties

-

-

2,960

Deposit on acquisition of subsidiary

-

(200,000)

-

Net cash used in investing activities

(4,904,825)

(5,689,660)

(1,479,400)

Cash flows from financing activities







Proceeds from issuances of common shares

-

-

7,111,325

Repayment to related parties

-

(9,703)

(739,973)

Deposit on loan agreement

(503,939)

(473,698)

-

Proceeds from loans due within one year

7,454,711

11,493,557

8,805,683

Repayment of loans due within one year

(8,046,350)

(11,952,224)

(3,283,830)

Proceeds from long-term loans

6,376,169

8,631,493

-

Payment of debt issuance costs

(335,938)

(284,219)

-

Repayment of long-term loans

(7,736,415)

(730,595)

-

Net cash provided by (used in) financing activities

(2,791,762)

6,674,611

11,893,205

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash

(124,050)

(404,956)

222,973

Net change in cash, cash equivalents and restricted cash

5,470,959

(1,876,782)

7,447,077

Cash, cash equivalents and restricted cash, beginning of the year

8,494,983

10,371,765

2,924,688

Cash, cash equivalents and restricted cash, end of the year

$

13,965,942

$

8,494,983

$

10,371,765









Supplemental cash flow information







Cash paid for interest

$

608,431

$

689,867

$

244,753

Cash paid for income taxes

$

977,755

$

1,507,489

$

656,602









Non-cash investing and financing activities:







Properties acquired with loans

$

-

$

52,161

$

206,000

Liabilities assumed in connection with purchase of property, plant and equipment

$

2,980,582

$

2,636,770

$

7,445,478

Operating expenses paid by related parties

$

-

$

9,703

$

-

Property, plant and equipment transferred from inventories

$

2,791,339

$

1,566,314

$

-

Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets







Cash and cash equivalents

$

9,944,765

$

2,461,501

$

3,118,080

Restricted cash

4,021,177

6,033,482

7,253,685

Total cash, cash equivalents and restricted cash

$

13,965,942

$

8,494,983

$

10,371,765

SOURCE Newater Technology, Inc.

Related Links

http://dtnewa.com/

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