PINGDINGSHAN, China,
May 16, 2016 /PRNewswire/
-- Yulong Eco-Materials Limited (NasdaqCM: YECO), an
eco-friendly building products and construction waste management
company, today announced its financial results for fiscal 2016
Q3 and 9M periods ended March 31,
2016.
Financial Snapshot ($ million)
|
Q3
fiscal
2016
|
Q3
fiscal
2015
|
%
change
|
9M
fiscal 2016
|
9M
fiscal
2015
|
%
change
|
Revenue
|
11.2
|
10.4
|
7.2%
|
37.1
|
33.6
|
10.4%
|
Gross
Profit
|
4.3
|
4.0
|
8.9%
|
14.5
|
12.2
|
18.8%
|
Gross
Margin
|
38.5%
|
37.9%
|
60 bps
|
39.2%
|
36.4%
|
270 bps
|
Income
from Operations
|
3.6
|
3.0
|
17.1%
|
11.4
|
9.4
|
21.9%
|
Net
Income
|
2.5
|
2.0
|
24.3%
|
8.2
|
6.2
|
32.5%
|
EPS*
|
0.21
|
0.26
|
(19.2)%
|
0.69
|
0.78
|
(11.5)%
|
*Basic and diluted
earnings per share for the Q3 and 9M periods of fiscal 2016 were
calculated on approximately 49% more shares outstanding than in the
prior year period, due to new shares issued in Yulong's IPO
completed on July 1, 2015.
|
For fiscal 2016 9M, as compared to the same period of fiscal
2015, the Company reported 10.4% increase in revenue to a record of
$37.1 million and 32.5% increase in
net income to $8.2 million, mainly
due to approximately $5.5 million
incremental high margin revenue generated by construction waste
management (CWM) segment.
Total gross margin for fiscal 2016 9M improved to 39.2% vs.
36.4% for the same period of fiscal 2015, mainly due to the 58.3%
gross margin generated by the construction waste management, or
CWM, business, offset by lower gross margin for the brick business
which was a result of lower average selling price per unit.
Although total SG&A expenses increased by 9% to
$3.1 million mainly due expenses
associated with costs related to our public company status (which
were not incurred in the same period of fiscal 2015), as a percent
of total revenue they decreased to 8.5% vs. 8.6% for the same
period of fiscal 2015. As a result, we reported substantial
improvement to our bottom line as income from operations for fiscal
2016 9M period improved by 21.9%, and net income increased by
32.5%, as compared to the same period of fiscal 2015.
Cash and cash equivalents at March 31,
2016 increased to approximately $31.8
million, as compared to $16.5
million at June 30, 2015;
total liabilities decreased to $23.0
million as compared to $30.9
million at June 30,
2015.
Announces Guidance for Fiscal 2016
Fiscal 2016 Q4 is expected to be another strong quarter in terms
of revenue and net income, thus for fiscal 2016, the Company
expects:
- Revenue of between $49 million and $52
million, representing an increase of 7% to 12% vs. fiscal
2015. The CWM segment, which commenced operations in
April 2015, has become the catalyst
of top and bottom line growth. For fiscal 2016, we
expect this segment to continue to grow and to represent over 15%
of Yulong's total revenue, while our brick and cement businesses
are expected to remain stable.
- Net income to continue to grow at a faster rate than revenue,
due to revenue from our high margin CWM business. Thus, we
expect net income to be between $11 million
and $12 million, representing an increase of approximately
27% to 38% vs. fiscal 2015.
CWM Business
Henan province, located in
central part of China, is a
major transportation, logistics, industrial, and resource
distribution hub of the country. China's central government has budgeted
several billion dollars to further expand and upgrade the
province's infrastructure and develop new financial and industrial
zones. To make way for these new developments, hundreds
of thousands of older residential and commercial buildings need to
be demolished, generating hundreds of millions metric tons of
construction waste that need to be recycled, processed and
reutilized. Thus, we believe the need for CWM services throughout
Henan, will continue to grow for
the next 10 years, which we believe Yulong is well positioned to
take advantage of going forward. Current and future
opportunities to grow our CMW business include:
- Zhengzhou City
- Zhengdong New District: Currently, the Company has completed
three assignments and expects to receive new assignments
soon.
- Zhengzhou Airport Zone: To date, the Company has signed
contracts with five out of 13 administrative offices in the zone,
and is processing waste from approximately 3,300 demolished
homesteads. The Company is negotiating with the other
administrative offices.
- Of the total $5.5 million CWM
revenue generated during the first nine months of fiscal 2016,
approximately $3.7 million were
generated from Zhengzhou
projects.
- Shangqiu City:
- The Company, being the exclusive CWM service provider in the
city, is currently providing waste hauling services for the
proposed high-speed rail line connecting the cities of Zhengzhou in Henan, and Xuzhou in Jiangsu
Province.
- The Company is continuing to evaluate request from local
government to consolidate local unlicensed construction waste
hauling businesses.
- Provincial Technical Code
- The publication of the provincial technical code for using
recycled construction waste in roadbed construction allows the
Company to begin selling its recycled aggregates in Henan. With Yulong's current mobile
processing capacity in Zhengzhou,
we estimate that sales of recycled aggregates accumulated at
several processing sites throughout the city can generate at least
$6 million in annual revenue starting
in fiscal 2017. In that regard, the Company is preparing to
increase its processing capacity in anticipation of the
government's plan to build new roads and improve existing ones,
which has the potential to generate approximately $100 million in sales within the next five
years.
- The Company is actively negotiating with several large local
road and highway builders, and expects to announce the signing of
contracts to sell its recycled aggregates to these builders in the
near future.
About Yulong Eco-Materials
Yulong is a vertically integrated manufacturer of eco-friendly
building products and a construction waste management company
located in the city of Pingdingshan in Henan Province, China. The Company is currently Pingdingshan's
leading producer of fly-ash bricks and concrete as well as
exclusive provider of CWM services in Pingdingshan and
Shangqiu.
Forward-Looking Statements
This press release contains forward-looking statements,
particularly as related to, among other things, the business plans
of the Company, statements relating to goals, plans and projections
regarding the Company's financial position and business strategy.
The words or phrases "plans," "would be," "will allow," "intends
to," "may result," "are expected to," "will continue,"
"anticipates," "expects," "estimate," "project," "indicate,"
"could," "potentially," "should," "believe," "think," "considers"
or similar expressions are intended to identify "forward-looking
statements." These forward-looking statements fall within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Act of 1934 and are subject to the safe
harbor created by these sections. Actual results could differ
materially from those projected in the forward-looking statements
as a result of a number of risks and uncertainties. Such
forward-looking statements are based on current expectations,
involve known and unknown risks, a reliance on third parties for
information, transactions or orders that may be cancelled, and
other factors that may cause our actual results, performance or
achievements, or developments in our industry, to differ materially
from the anticipated results, performance or achievements expressed
or implied by such forward-looking statements. Factors that could
cause actual results to differ materially from anticipated results
include risks and uncertainties related to the fluctuation of
local, regional, and global economic conditions, the performance of
management and our employees, our ability to obtain financing,
competition, general economic conditions and other factors that are
detailed in our periodic reports and on documents we file from time
to time with the Securities and Exchange Commission. Statements
made herein are as of the date of this press release and should not
be relied upon as of any subsequent date, and the Company
specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences, developments,
unanticipated events or circumstances after the date of such
statement.
Contact:
Investor Relations Counsel:
The Equity Group Inc.
Lena Cati, 212-836-9611
Vice President
lcati@equityny.com
www.theequitygroup.com
YULONG ECO-MATERIALS
LIMITED AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME
(UNAUDITED)
|
|
|
For the Three Months
Ended March 31,
|
|
|
For the Nine Months
Ended March 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
Bricks
|
|
$
|
3,429,182
|
|
|
$
|
3,685,593
|
|
|
$
|
10,895,564
|
|
|
$
|
11,760,921
|
|
Concrete
|
|
|
6,219,209
|
|
|
|
6,763,023
|
|
|
|
20,798,897
|
|
|
|
21,888,479
|
|
Recycling
|
|
|
1,556,473
|
|
|
|
-
|
|
|
|
5,452,931
|
|
|
|
-
|
|
TOTAL
REVENUES
|
|
|
11,204,864
|
|
|
|
10,448,616
|
|
|
|
37,147,392
|
|
|
|
33,649,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bricks
|
|
|
1,548,895
|
|
|
|
1,466,709
|
|
|
|
4,868,376
|
|
|
|
4,654,917
|
|
Concrete
|
|
|
4,632,665
|
|
|
|
5,022,570
|
|
|
|
15,458,608
|
|
|
|
16,753,593
|
|
Recycling
|
|
|
712,495
|
|
|
|
-
|
|
|
|
2,274,255
|
|
|
|
-
|
|
TOTAL COST OF REVENUES
|
|
|
6,894,055
|
|
|
|
6,489,279
|
|
|
|
22,601,239
|
|
|
|
21,408,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
4,310,809
|
|
|
|
3,959,337
|
|
|
|
14,546,153
|
|
|
|
12,240,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
|
|
|
85,335
|
|
|
|
144,026
|
|
|
|
336,245
|
|
|
|
509,789
|
|
General and
administrative
|
|
|
670,288
|
|
|
|
779,574
|
|
|
|
2,812,501
|
|
|
|
2,379,241
|
|
Total operating
expenses
|
|
|
755,623
|
|
|
|
923,600
|
|
|
|
3,148,746
|
|
|
|
2,889,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
|
3,555,186
|
|
|
|
3,035,737
|
|
|
|
11,397,407
|
|
|
|
9,351,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
28,372
|
|
|
|
17,423
|
|
|
|
74,409
|
|
|
|
45,844
|
|
Interest
expense
|
|
|
(251,372)
|
|
|
|
(305,034)
|
|
|
|
(737,042)
|
|
|
|
(955,048)
|
|
Change in fair value
of warrant liabilities
|
|
|
36,663
|
|
|
|
-
|
|
|
|
179,437
|
|
|
|
-
|
|
Other (expense)
income, net
|
|
|
(12,558)
|
|
|
|
(52,098)
|
|
|
|
173,532
|
|
|
|
(138,708)
|
|
Total other expense,
net
|
|
|
(198,895)
|
|
|
|
(339,709)
|
|
|
|
(309,664)
|
|
|
|
(1,047,912)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
|
|
3,356,291
|
|
|
|
2,696,028
|
|
|
|
11,087,743
|
|
|
|
8,303,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
|
|
810,791
|
|
|
|
648,591
|
|
|
|
2,865,311
|
|
|
|
2,097,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
2,545,500
|
|
|
|
2,047,437
|
|
|
|
8,222,432
|
|
|
|
6,206,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
500,223
|
|
|
|
188,779
|
|
|
|
(3,535,743)
|
|
|
|
237,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME
|
|
$
|
3,045,723
|
|
|
$
|
2,236,216
|
|
|
$
|
4,686,689
|
|
|
$
|
6,444,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF COMMON SHARES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
11,970,616
|
|
|
|
8,000,000
|
|
|
|
11,903,375
|
|
|
|
8,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.21
|
|
|
$
|
0.26
|
|
|
$
|
0.69
|
|
|
$
|
0.78
|
|
YULONG ECO-MATERIALS
LIMITED AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
ASSETS
|
CURRENT
ASSETS
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
31,759,252
|
|
|
$
|
16,470,299
|
|
Accounts
receivable
|
|
|
14,120,224
|
|
|
|
9,329,495
|
|
Deposits and other
receivables
|
|
|
1,092,865
|
|
|
|
286,153
|
|
Inventories
|
|
|
573,939
|
|
|
|
364,254
|
|
Advances to
suppliers
|
|
|
118,291
|
|
|
|
17,421
|
|
Prepaid expenses and
other
|
|
|
210,451
|
|
|
|
373,617
|
|
Total current
assets
|
|
|
47,875,022
|
|
|
|
26,841,239
|
|
|
|
|
|
|
|
|
|
|
PLANT AND EQUIPMENT,
net
|
|
|
39,289,978
|
|
|
|
41,267,655
|
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
|
|
|
Prepayments
|
|
|
2,853,914
|
|
|
|
3,658,748
|
|
Intangible assets,
net
|
|
|
4,568,757
|
|
|
|
4,913,376
|
|
Deferred tax asset,
net
|
|
|
665,575
|
|
|
|
520,147
|
|
Long-term
deposit
|
|
|
611,043
|
|
|
|
397,300
|
|
Prepaid expenses-net
of current portion
|
|
|
50,000
|
|
|
|
-
|
|
Total other
assets
|
|
|
8,749,289
|
|
|
|
9,489,571
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
95,914,289
|
|
|
$
|
77,598,465
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Short term loan -
bank
|
|
$
|
7,398,270
|
|
|
$
|
7,972,190
|
|
Accounts payable,
trade
|
|
|
2,550,941
|
|
|
|
1,726,158
|
|
Other payables and
accrued liabilities
|
|
|
5,605,400
|
|
|
|
4,817,399
|
|
Other payables -
related parties
|
|
|
20,163
|
|
|
|
2,584,104
|
|
Customer
deposits
|
|
|
537,698
|
|
|
|
-
|
|
Taxes
payable
|
|
|
2,324,746
|
|
|
|
1,098,093
|
|
Capital lease
obligation
|
|
|
4,217,120
|
|
|
|
4,615,083
|
|
Dividends
payable
|
|
|
-
|
|
|
|
7,994,125
|
|
Warrant
liabilities
|
|
|
295,943
|
|
|
|
-
|
|
Total current
liabilities
|
|
|
22,950,281
|
|
|
|
30,807,152
|
|
|
|
|
|
|
|
|
|
|
LONG TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
Capital lease
obligation-net of current portion
|
|
|
58,763
|
|
|
|
138,952
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
23,009,044
|
|
|
|
30,946,104
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Common stock,
$0.00125 par value, 100,000,000 shares authorized, 11,997,184 and
8,000,000 shares issued and outstanding at March 31, 2016 and June
30, 2015, respectively
|
|
|
14,997
|
|
|
|
10,000
|
|
Subscription
receivable
|
|
|
(10,000)
|
|
|
|
(10,000)
|
|
Additional paid-in
capital
|
|
|
40,572,662
|
|
|
|
19,011,464
|
|
Statutory
reserves
|
|
|
3,922,228
|
|
|
|
3,922,228
|
|
Retained
earnings
|
|
|
29,434,261
|
|
|
|
21,211,829
|
|
Accumulated other
comprehensive (loss) income
|
|
|
(1,028,903)
|
|
|
|
2,506,840
|
|
Total
equity
|
|
|
72,905,245
|
|
|
|
46,652,361
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
95,914,289
|
|
|
$
|
77,598,465
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/yulong-reports-104-increase-in-revenue-and-325-increase-in-net-income-for-9m-of-fiscal-2016-300268912.html
SOURCE Yulong Eco-Materials Limited