-- Third Quarter Revenue Increased 92% to $12.6 million -- YTD
Revenues increased 57% to $25 million, and Net Income increased 35%
to $1.4 million with $.20 in EPS -- Company anticipates launching
its new flat plate collector production and water tank assembly
lines in first quarter 2008 -- Company recently appoints new CFO
and Director LOS ANGELES and BEIJING, Nov. 14
/Xinhua-PRNewswire-FirstCall/ -- China Solar & Clean Energy
Solutions, Inc. (f/k/a Deli Solar (USA), Inc.) (OTC Bulletin Board:
CSOL) ('we,' 'us', the 'Company' or 'CSOL'), a premier manufacturer
and distributor of solar water heaters, renewable energy solutions,
and space heating devices in the People's Republic of China (the
"PRC"), today announced its results for the third quarter ended
September 30, 2007. Three Month Results Sales for the third quarter
of 2007 increased 92% to $12.6 million compared to $6.6 million for
the same quarter of 2006. On July 1, 2007, we acquired 51% of
Tianjin Huaneng Energy Equipment Company, a company incorporated in
China ('Tianjin Huaneng'), which manufactures energy saving boilers
and environmental protection equipment for industrial customers for
a purchase price of $1,689,741. Tianjin Huaneng's business
contributed $3.8 million in revenue for the third quarter of 2007
compared to none for the same period in 2006. $2.2 million, or 37%
of the revenue growth during the quarter, was organic and emanated
from increased marketing efforts coupled with an expansion of the
company's network of distributors. Gross profit for the three
months ended September 30, 2007 was $2.6 million, an increase of
approximately 86% from the third quarter of 2006. Gross margin was
20.2% compared to 20.9% for the third quarter 2006. The slight
reduction was primarily due to price competition in solar water
heater market in China. Operating expenses for the three months
ended September 30, 2007 increased 115.3% to $1.8 million compared
to the same period in 2006, a result of increased input in
advertising and promotional expenses for the purpose of gaining
market share, in addition to after sales service, as well as
selling expenses directly related to Tianjin Huaneng's increased
sales volume. Operating income for the third quarter of 2007
totaled $0.8 million, a 41% increase, compared to $0.6 million for
the same period in 2006. Principally a result of the increased
operating expenses and income taxes, net income for the third
quarter of 2007 decreased 9.2% to $0.5 million from $0.6 million in
net income for the same period in 2006, earnings per share
decreased to $.06 for the third quarter of 2007 from $.07 per share
for the same period in 2006. Calculations were based upon 8.31
million and 8.03 million weighted average number of shares
outstanding respectively. Taxes paid during the quarter were $0.2
million compared to none in the year ago period, equating to an
effective tax rate of approximately 25.3 percent compared to none
in the 2006 third quarter. 'We are pleased with our strong growth
during the quarter. The acquisition of Tianjin Huaneng Energy
Equipment Company, along with continued organic growth within our
core solar water heater business enabled us to achieve a 92%
increase in revenues,' commented Mr. Deli Du, President and Chief
Executive Officer. 'While margins were slightly impacted by
competition and pricing pressure, a factor which we believe will
continue, we anticipate that Tianjin Huaneng's proprietary energy
saving boilers and environmental protection equipment will improve
our overall operating profitability on a go forward basis. In
addition, we are very close to completing the installation of our
new flat plate collector production and water tank assembly lines,
which we expect to be fully operational during the first quarter of
2008. We believe this will improve our production efficiencies and
capacity, and the quality of our products while enhancing both
margins and profitability on a go forward basis,' continued Mr. Du.
Nine Month Results Sales increased approximately 57% to $25 million
for nine months ended September 30, 2007 as compared to $16 million
for the same period last year. Operating expenses for the nine
months ended September 30, 2007 were $3.4 million as compared to
$2.4 million for the same period in 2006, an increase of 42.7%
which includes expenses from Tianjin Huaneng since the acquisition
on July 1, 2007. Operating income for the nine months ended
September 30, 2007 was $1.8 million, an increase of 73.7% as
compared to $1.1 million for the nine months ended September 30,
2006. Net income was $1.4 million for the nine months ended
September 30, 2007, an increase of $0.4 million, or approximately
35.4% compared to same period last year. This equated to earnings
of $.20 per share, compared to $.13 per share for the first nine
months of 2006 based on 7.04 million and 8.03 million weighted
average number of shares respectively. Balance Sheet and Cash Flow
Discussion From a balance sheet perspective, the Company had $3.3
million in cash and equivalents on September 30, 2007 while
stockholders' equity increased to $16.6 million, representing a
book value of approximately $2.00 per diluted share. Net cash flow
from operations was $324,013 for the nine months ended September
30, 2007. Inventory increased to $5.2 million and accounts
receivable increased to $7.2 million due to the consolidation with
Tianjin Huaneng. Different from CSOL's core business, Tianjin
Huaneng collects receivables during the project life, where 30
percent of the total cost is pre-paid by customers, 30 percent is
paid once installation is commenced, 30 percent is paid when
installation is completed and 10 percent is held back for one year
to guarantee work. 'Inventory levels were directly related to
longer-term projects. Tianjin Huaneng is currently fulfilling for
its customers and we expect a significant portion to convert to
revenue during the fourth quarter with further improvements made
for inventory management on a go forward basis. The increase in
accounts receivable were also related to Tianjin Huaneng which
extends credit terms to customers. In addition, we continue to
evaluate new acquisition targets which will complement our product
portfolio as an integrated clean technology energy solution
provider and open up new market opportunities in China.' 'We would
like to welcome Mr. Gary Lam who recently joined CSOL as our new
CFO. He brings extensive corporate finance experience and expertise
in developing strategic business plans. In addition, we would like
to welcome Mr. Randolph to the board of directors as his experience
in a variety of Asian companies will complement the Board's
composition while further assisting with all corporate governance
issues. We believe these gentlemen will benefit us as we continue
to grow organically and through strategic acquisitions, while
further evolving as a public company,' Mr. Du concluded. About
China Solar & Clean Energy Solutions, Inc. China Solar &
Clean Energy Solutions, Inc. operates through its wholly owned
subsidiaries Bazhou Deli Solar Heating Energy Co. Ltd., Beijing
Deli Solar Technology Development Co., Ltd. and its 51% ownership
in Tianjin Huaneng, all of which are located in the PRC. The
Company manufactures and distributes hot water and space heating
devices to customers in the PRC, in addition to waste heat recovery
systems. For more information, please visit
http://www.delisolar.com/ . Safe Harbor Statement: Certain
statements in this news release may contain forward-looking
information about China Solar & Clean Energy Solutions, Inc.
and its subsidiaries' business and products within the meaning of
Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the
Securities Exchange Act of 1934, and are subject to the safe harbor
created by those rules. The actual results may differ materially
depending on a number of risk factors including, but not limited
to, the general economic and business conditions in the PRC, market
and customer acceptance and demand for products, ability to market
products, fluctuations in foreign currency markets, the use of
estimates in the preparation of financial statements, the impact of
competitive products and pricing, the ability to develop and launch
new products on a timely basis, the regulatory environment,
fluctuations in operating results, and various other factors beyond
its control. All forward-looking statements are expressly qualified
in their entirety by this Cautionary Statement and the risks
factors detailed in the Company's reports filed with the Securities
and Exchange Commission. China Solar & Clean Energy Solutions,
Inc. undertakes no duty to revise or update any forward-looking
statements to reflect events or circumstances after the date of
this release. -- FINANCIAL TABLES FOLLOW -- Balance Sheets
(unaudited) Assets September 30, December 31, 2007 2006 Current
assets Cash and cash equivalents $3,311,421 $3,212,065 Trade
accounts receivable 7,220,091 986,809 Allowances for doubtful
accounts (811,950) (116,363) Net trade accounts receivable
6,408,141 870,446 Advance to suppliers 1,348,254 1,007,709 Prepaid
expenses 29,129 58,203 Inventories 5,238,184 315,765 Total current
assets 16,335,129 5,464,188 Property, plant and equipment Buildings
4,457,449 3,528,180 Machinery and equipment 1,348,627 71,131
Vehicles 364,891 76,176 Computer equipment 31,483 12,625 Office
equipment 177,209 65,749 Construction in progress 3,336,862
2,580,031 Total plant and equipment 9,716,521 6,333,892 Accumulated
depreciation (1,723,631) (407,424) Net property, plant and
equipment 7,992,890 5,926,468 Other receivables 1,583,569 321,999
Prepaid land lease 1,560,428 1,003,530 Total other assets 3,143,997
1,325,529 Goodwill 1,773,550 -- Total assets $29,245,566
$12,716,185 Liabilities and stockholders' September 30, December
31, equity 2007 2006 Current liabilities Trade accounts payable
$1,623,020 $147,901 Related party payable 500 22,528 Other payables
1,389,768 35,934 Accrued expenses 736,043 22,080 Deposits 3,493,478
262,269 Taxes payable 1,975,859 Deferred revenue 678,486 Short-term
notes payable 1,154,703 -- Total current liabilities 11,051,857
490,712 Long term loans 778,474 -- Minority Interests 785,018 --
Stockholders' equity Convertible preferred stock: par value $0.001;
25,000,000 shares authorized, 2,674,194 shares issued and
authorized 2,674 -- Common stock: par value $0.001; 66,666,667
shares authorized, 6,205,290 shares issued and outstanding 6,205
6,205 Additional paid in capital 8,283,900 5,705,574 Retained
earnings 7,400,960 5,979,785 Accumulated other comprehensive income
936,478 533,909 Total stockholders' equity 16,630,217 12,225,473
Total Liabilities and stockholders' equity $29,245,566 $12,716,185
Consolidated Statements of Operations and Comprehensive Income
(unaudited) Three Three Nine Nine months months months months ended
ended ended ended September September September September 30, 2007
30, 2006 30, 2007 30, 2006 Sales revenues $12,629,636 $6,565,606
$25,043,660 $15,982,081 Cost of goods sold 10,078,609 5,190,840
19,817,653 12,549,545 Gross profit 2,551,027 1,374,766 5,226,007
3,432,536 Operating expenses Advertising 458,652 382,287 1,118,745
881,190 Selling expense 583,166 145,073 864,698 330,400 Salaries
and benefits 111,656 88,113 260,649 194,319 Depreciation 82,731
29,943 153,697 89,208 Other general and administrative 532,137
175,914 987,093 877,544 Total operating expenses 1,768,342 821,330
3,384,882 2,372,661 Net operating income 782,685 553,436 1,841,125
1,059,875 Other income (expense) Interest income (expense) (31,845)
(3,898) (30,207) (10,108) Total other income (expense) (31,845)
(3,898) (30,207) (10,108) Net income before minority interest and
taxes 750,840 549,538 1,810,918 1,049,767 Taxes 189,770 -- 327,747
-- Net income after taxes $561,070 $549,538 $1,483,171 $1,049,767
Minority Interests 61,996 -- 61,996 -- Net income $499,074 $549,538
$1,421,175 $1,049,767 Foreign Currency Translation Adjustment
154,609 194,660 402,569 286,200 Comprehensive Income $653,683
$744,198 $1,823,743 $1,335,967 Basic earnings per share $0.08 $0.09
$0.23 $0.17 Denominator for basic EPS 6,205,290 6,205,290 6,205,290
6,205,290 Fully diluted earnings per share $0.06 $0.07 $0.20 $0.13
Denominator for diluted EPS 8,310,856 8,031,009 7,039,341 8,031,009
For more information, please contact: Gary Lam China Solar &
Clean Energy Solutions, Inc. Tel: +86-10-6385-0516 Email: Matthew
Hayden HC International, Inc. Tel: +1-858-704-5065 Email:
DATASOURCE: China Solar & Clean Energy Solutions, Inc. CONTACT:
Gary Lam of China Solar & Clean Energy Solutions, Inc., +86-10-
6385-0516, ; or Matthew Hayden of HC International, Inc.,
+1-858-704-5065, or , for CSOL Web Site: http://www.delisolar.com/
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