THT Heat Transfer Technology, Inc. Announces Third Quarter 2012
Results
SIPING, China, Nov. 14, 2012 /PRNewswire/ -- THT Heat
Transfer Technology, Inc. (NASDAQ:THTI, "the Company", or "THT"), a
leading provider of heat exchangers and heat exchange solutions in
China's clean technology
industry, today announced its unaudited financial results for the
third quarter ended September 30,
2012.
Third Quarter 2012 Financial
Highlights
- Sales revenue increased by 21.3% year-over-year to US$12.5 million. Sales revenue exceeded the
Company's previously announced guidance of US$10 million to US$12 million for the third
quarter 2012.
- Gross profit increased by 14.9% year-over-year to US$5.2 million.
- Gross margin was 41.4%, compared to 43.8% for the third quarter
2011.
- Operating income increased by 325.7% year-over-year to
US$0.8 million.
- Net income attributable to common stockholders increased by
312.7% year-over-year to US$0.5
million.
- Basic and fully diluted net income per share was US$0.02, compared with net income per share of
US$0.01 for the third quarter
2011.
Chairman and Chief Executive Officer Guohong Zhao commented, "Against a backdrop of
continuing global macroeconomic headwinds, moderating domestic
economic activity and more conservative credit policies, we managed
to deliver a steady financial performance in the third quarter with
revenues exceeding our guidance. The market for plate heat
exchanges and air-cooled heat exchangers remained challenging, with
revenues in both segments decreasing on a year-over-year basis.
However, this decrease was offset by robust growth in heat exchange
units and shell-and-tube heat exchangers, continuing the trend from
the preceding quarter and further demonstrating the success of our
strategy to develop a more diversified and stable revenue base.
"While we are pleased with our progress in the quarter and are
beginning to see some positive longer-term economic indicators, we
expect that the challenging market conditions that we have faced
over the past year will continue to impact demand in our end
markets in the fourth quarter. As a result, we have taken a
conservative view of our outlook and expect revenue in the fourth
quarter to decline on a year-over-year basis. Nevertheless, we
believe that our underlying business and our financial position
remain sound, and that we have the right strategy in place to
return us to a growth trajectory as and when the economy
improves."
Third Quarter 2012 Financial
Results
Revenue
Sales revenue for the third quarter 2012 was US$12.5 million, a 21.3% increase from
US$10.3 million during the same
period in 2011, primarily due to increased sales revenue from heat
exchange units and shell-and-tube heat exchangers. Sales volume of
heat exchange products totaled 704 units in the third quarter 2012,
an increase of 59 units from 645 units in the same period of
2011.
In terms of revenue breakdown for the third quarter 2012, sales
revenue from heat exchange units increased by US$3.1 million, or 223.9%, to US$4.5 million from US$1.4
million in the same period of 2011, mainly due to the
increased product demand in the heating industry. Sales revenue
from shell-and-tube heat exchangers increased by US$1.4 million, or 178.6% year-over-year, to
US$2.2 million from US$0.8 million. During the third quarter 2012,
sales revenue from plate heat exchangers totaled US$4.4 million, a decrease of 5.1% compared with
US$4.6 million in the third quarter
2011. In addition, sales revenue from air-cooled heat exchangers
was US$0.1 million, an 87.9% decrease
from US$1.1 million compared to the
same period of 2011.
Cost of Sales
Cost of sales for the third quarter 2012 increased 26.3%
year-over-year to US$7.3 million from
US$5.8 million in the third quarter
2011, reflecting the increase in the Company's sales revenue.
Gross Profit and Gross Margin
Gross profit increased 14.9% to US$5.2
million during the third quarter 2012, from US$4.5 million in the same period of 2011, mainly
due to increased sales revenue. Gross margin was 41.4% for the
third quarter 2012, compared with 43.8% during the year-earlier
period, mainly due to an increase in labor costs and raw material
costs.
Operating Expenses
Administrative expenses increased 44.8% to US$2.4 million in the third quarter 2012, from
US$1.6 million for the same period of
2011, primarily due to an increase in allowance for doubtful
accounts.
Research and development expenses decreased 13.6% year-over-year
to US$0.3 million, from US$0.4 million in the third quarter 2011, mainly
due to the fewer number of new products currently under
development.
Selling expenses decreased 28.8% to US$1.6 million for the third quarter 2012,
compared with US$2.3 million during
the same period of 2011, mainly due to a decrease in travelling
expenses incurred by the Company's sales personnel.
This resulted in total operating expenses of US$4.3 million in the third quarter 2012, in line
with US$4.3 million in the same
period of 2011.
Other Income
Other income amounted to US$0.3
million in the third quarter 2012, a 354.1% increase from
approximately US$0.1 million in the
same period of 2011.
Income before Income Tax
Income before income tax was US$0.7
million in the third quarter 2012, compared with a loss
before income taxes of approximately US$0.1
million in the same period of 2011.
Income Tax
Income tax increased 38.6% to US$123,732 in the third quarter 2012 from
US$89,283 in the same period of 2011.
The increase was mainly due to an increase in taxable income.
Net Income
Net income attributable to common shareholders was US$0.5 million in the third quarter 2012, a
312.7% increase compared with US$0.1
million in the same period in 2011.
Basic and fully diluted net income per share was US$0.02 in the third quarter 2012, compared with
US$0.01 in the same period of
2011.
Liquidity
As of September 30, 2012, the
Company had cash and cash equivalents of US$7.2 million and restricted cash of
US$1.7 million. During the first nine
months of 2012, there was a net cash outflow of US$0.1 million, compared with a net cash outflow
of US$15.1 million in the same period
of 2011.
Net cash used in operating activities was US$4.3 million for the first nine months of 2012,
compared with US$14.2 million for the
same period of 2011. Net cash used in operating activities during
the first nine months of 2012 decreased compared to the same period
in 2011, mainly attributable to the fact that collections from
trade customers were relatively high in the 2012 period which was a
result of installment payments being made by the Company's
customers, credit sales granted to customers decreasing as a result
of decreased turnover, and other receivables prepayment and
deposits decreasing due to reduced cash advances to staff and
prepayment to trade suppliers for the nine month period ended in
September 30, 2012.
Net cash used in investing activities was US$1.1 million for the first nine months of 2012,
compared with US$5.6 million for the
same period in 2011.
Net cash provided by financing activities was US$5.3 million for the first nine months of 2012,
compared with net cash used in financing activities of US$4.4 million for the same period in 2011.
Fourth Quarter 2012 Guidance
THT expects to generate sales revenue in the range of
US$11 million to US$13 million in the
fourth quarter 2012, compared with US$19.2
million in the fourth quarter 2011. This represents the
Company's preliminary view, and is subject to change.
Recent Developments
The Company has received comments from the Securities and
Exchange Commission on its accounting treatment of the Make Good
Escrow Agreement (the "Make Good Agreement") entered on
November 2, 2010 in connection with
the Company's issuance of 4,453,500 shares to certain accredited
investors for approximately $14,251,200. The Company is in the process of
evaluating whether the treatment of the Make Good Agreement as
liability would have had a material effect on the Company's
financial statements for the period between November 2, 2010 and February 2013 when the make good pledger
eventually releases the make good shares to the investors.
Conference Call
THT senior management will host a conference call on
Thursday, November 15, 2012 at
8:00 a.m. (Eastern) / 5:00 a.m. (Pacific) / 9:00
p.m. (Beijing /
Hong Kong) to discuss the
Company's third quarter 2012 financial results and recent business
activity. The conference call may be accessed by calling:
US Toll Free:
|
1-800-860-2442
|
International
Toll:
|
+1-412-858-4600
|
Canada Toll
Free:
|
1-866-605-3852
|
China (North) Toll
Free:
|
10-800-712-2304
|
China (South) Toll
Free:
|
10-800-120-2304
|
Hong Kong Toll
Free:
|
800-962475
|
Passcode:
|
THT Heat Transfer
Technology
|
A telephone replay will be available shortly after the call
until November 26, 2012 by dialing
the following numbers:
US Toll Free:
|
1-877-344-7529
|
International
Toll:
|
+1-412-317-0088
|
Passcode:
|
10021145
|
A live webcast of the conference call and replay will be
available on the investor relations page of THT's website at
http://www.tht.cn/ir.asp.
About THT Heat Transfer Technology, Inc.
Through its Chinese operating subsidiaries, THT Heat Transfer
Technology, Inc. designs, manufactures and sells plate heat
exchangers, shell-and-tube heat exchangers, heat exchanger units
and other heat exchanger products with total heat exchange
solutions. Heat exchangers play an integral part in
helping customers improve energy efficiency. Used in a
number of industries, THT's products focus on energy conservation,
emission reduction and other environmentally friendly
applications. Its six major product categories are plate heat
exchangers, shell-and-tube heat exchangers, air-cooled heat
exchangers, weld plate heat exchangers, heat exchanger units and
plate-and-shell heat exchangers. The Company also offers
comprehensive heat exchange solutions.
THT's in-house R&D capabilities enable it to deliver
tailored products that better meet the changing demands of its
customers. The Company has a strong record of delivering
high-quality products and services to leading domestic and
international customers. THT has completed over 3,000 projects and
has provided heat exchange solutions to several Fortune 500
companies. The Company is headquartered in Siping City,
Jilin Province, China. For more information, please visit the
Company's website at www.tht.cn.
Safe Harbor Statement
This press release contains certain statements that may
include "forward looking statements". All statements other than
statements of historical fact included herein are "forward-looking
statements". These forward-looking statements are often identified
by the use of forward-looking terminology such as "believes,"
"expects" or similar expressions, and involve known and unknown
risks and uncertainties. Although the Company believes that the
expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. You should not
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including those discussed in the risk factor sections of
the Company's periodic reports that are filed with the Securities
and Exchange Commission and are available on its website
(http://www.sec.gov). All forward-looking statements attributable
to the Company or persons acting on its behalf are expressly
qualified in their entirety by these factors. Other than as
required under the securities laws, the Company does not assume a
duty to update these forward-looking statements.
Contact:
The
Company:
Mr. Jack Xiao
Investor Relations
Manager
THT Heat Transfer
Technology, Inc.
Tel:+86 (434) 326
6779
Email:
IR@tht.cn
|
Investor Relations
(Beijing):
Xiaoyan Su
Taylor
Rafferty
Tel: +86 (10) 8588
6722
Email:
tht@taylor-rafferty.com
|
Investor Relations
(US):
Bryan Degnan
Taylor
Rafferty
Tel: +1 (212) 889
4350
Email:
tht@taylor-rafferty.com
|
- FINANCIAL TABLES
FOLLOW -
THT Heat Transfer
Technology, Inc.
|
Consolidated Balance
Sheets
|
As of September 30, 2012
and December 31, 2011
|
(Stated in US Dollars
thousands)
|
|
|
September 30,
2012
(Unaudited)
|
December 31,
2011
(Audited)
|
|
|
|
Assets
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
$7,234
|
$7,340
|
Restricted
cash
|
1,653
|
1,726
|
Accounts receivable,
net
|
34,089
|
33,573
|
Inventories,
net
|
38,358
|
32,531
|
Other current
assets
|
18,168
|
9,763
|
Total current
assets
|
99,502
|
84,933
|
Long-term accounts
receivable
|
735
|
1,184
|
Other non-current
assets
|
14,018
|
13,693
|
Total assets
|
$114,255
|
$99,810
|
|
|
|
Liabilities
|
|
|
Current
liabilities
|
|
|
Short-term bank
loans
|
$22,438
|
$16,183
|
Other current
liabilities
|
32,015
|
25,748
|
Total current
liabilities
|
54,453
|
41,931
|
Long-term
loan
|
1,895
|
2,828
|
Total liabilities
|
56,348
|
44,759
|
Total shareholders'
equity
|
58,398
|
55,616
|
Noncontrolling
interests
|
(491)
|
(565)
|
Total liabilities and
equity
|
$114,255
|
$99,810
|
THT Heat Transfer
Technology, Inc.
|
Unaudited Consolidated
Statements of Income
|
(Stated in US Dollars
thousands, except earnings per share)
|
|
|
Three months ended
September 30,
|
|
2012
|
2011
|
|
|
|
Sales revenue
|
$12,508
|
$10,310
|
Cost of sales
|
(7,326)
|
(5,799)
|
|
|
|
Gross profit
|
5,182
|
4,511
|
|
|
|
Operating
expenses
|
|
|
Administrative expenses
|
2,383
|
1,646
|
Research and development expenses
|
315
|
365
|
Selling expenses
|
1,637
|
2,301
|
|
|
|
Total operating
expenses
|
4,335
|
4,312
|
|
|
|
Operating
income
|
847
|
199
|
Interest
income
|
7
|
11
|
Other income
|
283
|
62
|
Finance costs
|
(475)
|
(361)
|
|
|
|
Income (loss) before
income taxes
|
662
|
(89)
|
Income taxes
|
(124)
|
(89)
|
|
|
|
Net income (loss) before
noncontrolling interests
|
538
|
(178)
|
Net (income) loss
attributable to noncontrolling interest
|
(34)
|
300
|
|
|
|
Net income attributable
to the equity stockholders
|
$504
|
$122
|
|
|
|
Earnings per share
attributable to THT Heat Transfer
|
|
|
Technology, Inc. common stockholders
|
$0.02
|
$0.01
|
|
|
|
Weighted average number
of shares outstanding
|
|
|
- Basic and
diluted
|
20,453,500
|
20,453,500
|
THT Heat Transfer
Technology, Inc.
|
Unaudited Consolidated
Statements of Cash Flows
|
For the nine months
ended September 30, 2012 and 2011
|
(Stated in US Dollars
thousands)
|
|
|
Nine months ended
September 30,
|
|
2012
|
2011
|
Net cash used in
operating activities
|
$
|
(4,338)
|
$
|
(14,163)
|
Net cash used in
investing activities
|
|
(1,121)
|
|
(5,587)
|
Net cash provided for
financing activities
|
|
5,311
|
|
4,362
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
42
|
|
254
|
Net decrease in cash and
cash equivalents
|
|
(106)
|
|
(15,134)
|
Cash and cash
equivalents at beginning of the period
|
|
7,340
|
|
18,438
|
Cash and cash
equivalents at end of the period
|
$
|
7,234
|
$
|
3,304
|
SOURCE THT Heat Transfer Technology, Inc.