Wowjoint Holdings Limited Reports First Quarter 2012 Financial Results

BEIJING, May 15, 2012 /PRNewswire-Asia/ -- Wowjoint Holdings Limited ("Wowjoint," or the "Company") (Nasdaq: BWOW), China's innovative infrastructure solutions provider of customized heavy duty lifting and carrying machinery, reported today financial results for the first quarter 2012.

First Quarter Ended March 31, 2012

• Revenues for the Company's first quarter ended March 31, 2012 was $1.2 million as compared to $6.6 million in the first quarter of 2011.
• Revenue from leasing increased by 333% to $1.1 million compared to the first quarter of 2011. These services, as well as technical service sales, continue to be a focus for Wowjoint as they provide a more stable source of cash flows and higher margins compared to machinery sales.  
• Gross profit was $0.4 million compared to $1.4 million for the same period last year. Gross margins increased 1330 basis points to 34.6% in the first quarter 2011 compared to 21.3% in the same period in 2011.
• Operating income was a loss of $1.0 million for the first quarter 2012 compared to operating income of $0.3 for the first quarter 2011.
• Net loss for the first quarter 2012 was $0.4 million, compared to net income of $0.4 million in same period 2011.

Cost of sales for the three months ended March 31, 2012 was approximately $0.8 million as compared to $5.2 million for the three months ended March 31, 2011. The lower cost of sales in first quarter 2012 was due to lower sales volume. Operating expenses for the three months ended March 31, 2012 were approximately $1.5 million compared to $1.1 million for the same period in 2011, due to the increase in sales staff. Selling expenses for the three months ended March 31, 2012 totaled $0.3 million compared to $0.2 million in the same period of 2011, due to a continued increase in sales force.

"The first quarter gross margins are a substantial increase from the first quarter 2011, due to a focus on reducing the material costs for our projects, as well as the diversification of our revenue stream, specifically with lease revenue. Lease revenue was very strong and we believe that will continue to grow, along with international sales and revenue from technical services," commented Mr. Yabin Liu, Chairman and Chief Executive Officer of Wowjoint. "In addition, during the first quarter we offered a stock dividend to our shareholders and commenced a warrant exchange to our warrants holders. We believe that both of these events demonstrate our belief in Wowjoint and provides for a solid capitalization structure."

Balance Sheet as of March 31, 2012

• Cash and cash equivalents totaled $1.5 million as of March 31, 2012, compared to $3.0 million at March 31, 2011.
• Accounts receivable were $9.5 million as of March 31, 2012 as compared to $16.8 million as of March 31, 2011. This substantial reduction in account receivables is due to a concentrated effort by the Company to collect its outstanding payables.
• Inventories decreased to $3.7 million, due to reduced sales.
• Working capital was $6.6 million on March 31, 2012.
• The Company had total stockholders' equity of $22.0 million, with total assets of $46.3 million versus total liabilities of $24.3 million on March 31, 2012.

"We continue to progress in our expansion of sales and order backlog. The additions we've made to our sales and marketing team have enabled us to secure new customers, enter new vertical markets and continue our international expansion," stated Mr. Yabin Liu, Chairman and CEO of Wowjoint.

Business Updates

Since the beginning of 2012, Wowjoint announced a contract to provide two Movable Scaffolding Systems in Malaysia. In addition, the Company signed a contract with Titan Peru S.A.C. to provide a tire gantry. These are both new international markets for Wowjoint and enable entry into Southeast Asia and South America. These emerging markets are expected to see vast infrastructure growth in the near future.

"We continued to expand our customer base, having signed contracts for projects in Malaysia and Peru since the beginning of 2012. Those contracts demonstrate our continued focus on sales and marketing to expand our reach beyond the large infrastructure possibilities in China," stated Mr. Liu. "The addition of our new R&D and manufacturing facility in Zhenjiang provides us with an ideal location in a strong economic zone and the facilities to provide enhanced services to our international customers, as well as the new projects we expect to receive through our partnership with Beijing Jiaotong University Yangtze River Delta Institute Wanqiao."

Revenue Guidance and Contract Backlog

Management issued revenue guidance for the second quarter of 2012 of approximately $1 to $2 million. As of March 31, 2012, Wowjoint's backlog of signed contracts totaled approximately $18.7 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 http://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: [email protected]
Website: www.wowjoint.com

SOURCE Wowjoint Holdings Limited

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED