Guanwei Recycling Corp. (NASDAQ: GPRC), a
leading clean-tech manufacturer in China of recycled low density
polyethylene (LDPE), today reported net income in its first quarter
ended March 31, 2013, grew 14.53% year over year as the Company
achieved small year over year increases in selling prices and sales
volume for its self manufactured recycled LDPE and manufacturing
costs continued to stabilize. EPS in the 2013 first quarter
increased to $0.23, compared with $0.21 a year earlier.
Financial Highlights
- Net revenues in the first quarter ended March 31, 2013 were
$14,839,806. This figure included $14,512,749 in sales of
manufactured recycled LDPE and sales of sorted non-LDPE material of
$327,057 in what typically is a slow quarter. In comparison, in the
2012 first quarter, manufactured recycled LDPE sales were
$14,044,642. However, the Company's net revenues in the 2012 first
quarter were $16,171,490, which included $1,689,081 in low margin
raw material sales which did not take place in the 2013 first
quarter. Sales of sorted non-LDPE materials in the 2012 first
quarter were $437,767. The Company noted that the year over year
3.33% increase in first quarter sales of manufactured recycled LDPE
in 2013 reflected a 0.99% increase in average selling prices to
approximately $1,223 per ton, while sales volume increased 2.30% to
11,867 tons.
- Gross profit in the 2013 first quarter increased 9.10% compared
with the same period last year, as the cost of revenue (consisting
of plastic waste raw material, labor and manufacturing overhead
costs) from sales of manufactured recycled LDPE and sorted non-LDPE
material declined to 73.86% of net revenue from 75.80% in the
comparable quarter in 2012. Labor costs per ton, which increased
strongly in 2012, stabilized and remained about the same in the
2013 first quarter as compared to the first quarter of 2012, while
per ton raw material costs declined approximately 1.79% to $766 per
ton. Excluding the sales of raw materials in the first quarter of
2012, gross margin improved to 26.14% in the 2013 first quarter,
compared with 24.2% in last year's first quarter.
- Net income in the first quarter of 2013 increased 14.53% to
$2,365,393 or $0.23 per share, compared with $2,065,256, or $0.21
per share in the same quarter last year. The weighted average
number of diluted common shares outstanding was 10,407,839 shares
in the 2013 first quarter as compared with 10,000,004 shares in the
year earlier period.
Financial Strength
As of March 31, 2013, working capital increased to $38,057,092
compared with $35,505,028 as of December 31, 2012. In part, this
reflected an increase in cash and cash equivalents to $13,491,880
from $12,083,358 at the end of 2012. Additionally, in the 2013
first quarter, accounts receivable decreased to $7,686,940 from
$9,305,104 at the end of 2012.
Outlook
"We continue to be very optimistic about our longer term
outlook," stated Mr. Min Chen, Chairman and CEO of the Company,
"for as the economy in China strengthens further, we anticipate
demand for our lower cost, high quality recycled LDPE will continue
to grow. We expect to sustain our competitive advantages by
remaining focused on maintaining our environmental leadership."
He added, "Since the third quarter of 2012, we have seen
continued stabilization in our manufacturing costs; in particular,
the cost of imported plastic waste, our primary raw material. Based
on current communications with our major suppliers, we believe that
average raw material costs should remain fairly stable for the
remainder of 2013."
Conference Call Invitation
The Company will discuss 2013 first quarter results during a
live conference call and webcast on Thursday, May
16th, at 8:00am ET.
To participate in the call, interested participants should call
1-888-846-5003 when calling within the United States or
1-480-629-9856 when calling internationally. Please ask for the
Guanwei Recycling Corp. 2013 First Quarter Conference Call,
Conference ID: 4619442. There will be a playback available until
May 23, 2013. To listen to the playback, please call 1-877-870-5176
when calling within the United States or 1-858-384-5517 when
calling internationally. Use the Replay Pin Number: 4619442.
This call is being webcast by ViaVid Broadcasting and can be
accessed by clicking on this link
http://public.viavid.com/index.php?id=104736 or at ViaVid's
website. at http://viavid.com.
Description of Guanwei Recycling Corp.
Adhering to the highest "green" standards, Guanwei Recycling
Corp. (the "Company") has generated rapid growth producing recycled
low density polyethylene (LDPE) from plastic waste procured mostly
in Europe. The Company sells the recycled LDPE to more than 300
customers (including over 150 active recurring customers) in more
than ten different industries in China. The Company is licensed by
Chinese authorities and also has been issued a Compliance
Certificate by Umweltagentur Erftstadt, which issues certificates
of approval for certain plastics manufacturers that meet Germany's
strict environmental standards. This enables the Company to procure
high quality plastic waste directly from Germany and other European
countries (Spain and Holland) with no middlemen, and permits highly
economic production of the highest grades of LDPE. Additional
information regarding Guanwei Recycling Corp. is available at
www.guanweirecycling.com.
Information Regarding Forward-Looking
Statements
Except for historical information contained herein, the
statements in this press release are forward-looking statements
that are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties, which
may cause our actual results in future periods to differ materially
from forecasted results. These risks and uncertainties include,
among other things, product demand, market competition, and risks
inherent in our operations. These and other risks are described in
our filings with the U.S. Securities and Exchange Commission.
GUANWEI RECYCLING CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
Three Months Ended
March 31,
-------------------------
2013 2012
------------ -----------
Net revenue $ 14,839,806 $16,171,490
Cost of revenue 10,960,865 12,616,104
------------ -----------
Gross profit 3,878,941 3,555,386
------------ -----------
Operating expenses:
Selling and marketing 155,906 89,522
General and administrative 599,287 658,870
------------ -----------
Total operating expenses 755,193 748,392
------------ -----------
Income from operations 3,123,748 2,806,994
------------ -----------
Other income (expenses)
Interest income 13,402 14,172
Net foreign exchange gain 59,943 31,926
Miscellaneous (681) -
------------ -----------
Total other income 72,664 46,098
------------ -----------
Income before income taxes 3,196,412 2,853,092
Income taxes 831,019 787,836
------------ -----------
Net income 2,365,393 2,065,256
Other comprehensive income - foreign currency
translation adjustments 263,295 213,418
------------ -----------
Comprehensive income $ 2,628,688 $ 2,278,674
============ ===========
Earnings per share - basic and diluted $ 0.23 $ 0.21
============ ===========
Weighted average number of common shares
outstanding - basic and diluted 10,407,839 10,000,004
============ ===========
GUANWEI RECYCLING CORP.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2013 2012
------------- -------------
ASSETS
Current assets
Cash and cash equivalents $ 13,491,880 $ 12,083,358
Accounts receivable 7,686,940 9,305,104
Inventories 16,647,065 18,696,648
Advances to suppliers 2,404,054 1,827,480
Value added tax refundable 131,661 -
Prepaid expenses and other current assets 156,325 131,564
------------- -------------
Total current assets 40,517,925 42,044,154
Property, plant and equipment, net 10,300,807 10,223,874
Land use right, net 663,574 663,800
Other assets 202,263 202,346
------------- -------------
Total Assets $ 51,684,569 $ 53,134,174
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 183,383 $ 4,082,982
Accrued expenses and other payables 755,983 796,705
Value added taxes payable - 110,484
Amount due to shareholder 689,082 517,863
Income tax payable 832,385 1,031,092
------------- -------------
Total current liabilities 2,460,833 6,539,126
------------- -------------
Commitments and contingencies
Shareholders' Equity
Common stock, $0.001 par value, 500,000,000
shares authorized, 10,407,839 shares issued
and outstanding, as of March 31, 2013 and
December 31, 20112 10,408 10,408
Additional paid-in capital 2,767,787 2,767,787
PRC statutory reserves 805,483 805,483
Accumulated other comprehensive income 2,810,294 2,546,999
Retained earnings 42,829,764 40,464,371
------------- -------------
Total shareholders' equity 49,223,736 46,595,048
------------- -------------
Total liabilities and shareholders' equity $ 51,684,569 $ 53,134,174
============= =============
GUANWEI RECYCLING CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------
2013 2012
------------ ------------
Cash flows from operating activities
Net income $ 2,365,393 $ 2,065,256
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Depreciation of property, plant and equipment 243,715 201,442
Amortization of land use rights 3,874 3,862
Changes in operating assets and liabilities:
Accounts receivable 1,666,653 (596,896)
Inventories 2,148,983 (2,372,226)
Advances to suppliers (565,584) -
Value added taxes refundable (131,445) (966,504)
Prepaid expenses and other current assets (24,388) 639,751
Other assets 1,195 1,191
Accounts payable (3,915,641) (1,091,044)
Accrued expenses and other payables (52,857) (75,454)
Value added taxes payable (110,910) -
Income tax payable (204,048) (379,550)
------------ ------------
Net cash provided by (used in) operating
activities 1,424,940 (2,570,172)
------------ ------------
Cash flows from investing activities
Purchase of property, plant and equipment (256,362) (12,727)
------------ ------------
Net cash used in investing activities (256,362) (12,727)
------------ ------------
Cash flows from financing activities
Advance from shareholder 171,219 187,647
------------ ------------
Net cash provided by financing activities 171,219 187,647
------------ ------------
Effect of exchange rate change on cash 68,725 84,558
------------ ------------
Net increase in cash and cash equivalents 1,408,522 (2,310,694)
Cash and cash equivalents at the beginning of
period 12,083,358 12,432,803
------------ ------------
Cash and cash equivalents at the end of period $ 13,491,880 $ 10,122,109
============ ============
Supplemental disclosure of cash flow information
Interest paid $ - $ -
============ ============
Income taxes paid $ 1,035,067 1,167,386
============ ============
Non-cash investing and financing activities
Accrued expense related to purchases of property,
plant and equipment $ 7,966 -
============ ============
Contacts: Richard Sun guanweirecycling@gmail.com Ken
Donenfeld DGI Investor Relations kdonenfeld@dgiir.com Tel:
212-425-5700 Fax: 646-381-9727
Guanwei Recycling (CE) (USOTC:GPRC)
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